They Went The Full Nine Yards

October 3, 2001
Marc Dupee

Nine cuts in nine months. The Federal Reserve showed
it is willing to go the full nine yards with monetary policy in order to get
the economy back on its feet. Yesterday, the Fed cut rates .50% to 2.5% in
its fastest and most forceful easing of monetary policy in nearly ten years.
The central bank also issued a statement maintaining it remains concerned
about further weakening in light of the 911 attacks, implying another rate
cut is on the horizon.

Stocks are following through on the late surge in
prices yesterday that came after a three-wave gyration that S&Ps veteran
Lewis Borsellino points out is common in the S&P futures pit.

The Dow is up 110.50 at 9061, the Nasdaq Composite is
up 80.24 at 1572, and the S&P 500 is up 14.91 at 1066.41.

But the market started the session soft after Nortel

(
NT |
Quote |
Chart |
News |
PowerRating), set a gloomy tone. Canada’s biggest telecom said it is cutting
20,000 from its payroll and will post a third-quarter loss of $3.6 billion
due to decreased sales.

Depressing news also greeted the market when Eli Lily
said sales of its Prozac medication were down and would cause the drug maker
to miss earnings expectations.

But the market found low and support near its opening
ticks and rallied after the National Association of Purchasing Management
said its non-manufacturing index unexpectedly rose to 50.2 from 45.5 in
August. The NAPM and NAPM-Chicago, the national and regional gauges of
manufacturing activity, also came in stronger than expected in recent days,
suggesting the economic down turn may be bottoming.

They Went The Full Nine Yards

BUY THE FEAR, SELL THE GREED

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