Stocks Surge on Fed Cut
The major averages continue to trade above the unchanged line
on Friday despite recent weakness. Stocks opened the session
posting significant gains on the heels of a rate cut from the
Federal Reserve
The Fed cut the discount rate by half a percentage point this
morning in hopes of adding liquidity to the credit markets. The
fact that they cut the discount rate instead of the federal funds
rate is seen as evidence that the problem is mainly contained
within the financial sector rather than the economy at large.
Crude oil futures for September delivery added
1.5% to $72.05 a barrel on news that a hurricane headed toward the
Gulf of Mexico may threaten rigs and pipelines. Gold
futures for December delivery added 2% to $670.90 an ounce.
Around Asia, Shanghai’s Composite index
dropped 2.3% to 4,656.57, Hong Kong’s Hang Seng index fell 1.4% to
20,387.13, and Tokyo’s Nikkei index lost 5.4% to 15,273.68.
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Darren Wong
Associate Editor
darrenw@tradingmarkets.com
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