What Fed Reaction Portends For Near Term
Stocks tried a brief rally Tuesday
then ended virtually flat after the Federal Reserve cut interest rates by a half
a percentage point. Semis and Internets popped but gave back much of their
gains.Â
Cutting short-term interest rates for
the fifth time this year, the Federal Open Market Committee lowered the Federal
Funds rate to 4.0% from 4.5%. Stocks spiked briefly, fell back, then zigzagged
on light volume. The Nasdaq Composite eked out a 0.2% gain. The Dow Jones
Industrials ended off 0.04%.Â
“Obviously, the market was not
impressed with a 50 basis point rate cut,” said Bryan Brown, principal of
Spectrum Equity Services, an institutional advisor. “The fact that we saw
no more power in the market than we did clearly indicates that the market’s
agenda is not the Fed’s. Expect the market to pull back from here.”
Among the sectors, the Philadelphia
Oil Service Index
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Paper Products Index
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1.0%.
On the downside, the S&P Retail
Index
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Index
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Among the gainers, Qualcom
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rose 4.8%, Circuit City
(
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Micro Devices
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Among the losers, CacheFlo
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declined 15.1%, ImmunoGen
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12.0%, Serologicals
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Positive corporate did little to help
stocks. Continental Airlines
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issued statements saying they see profits ahead, but both stocks edged lower.
Among the Dow components, SBC
Communications
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Wal-Mart
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