Looks like they are pricing in a 50 cut -->
Stocks Rise Amid Hopes for Steep Rate Cut
NEW YORK (Reuters) - Stocks headed higher in early afternoon trading on Thursday as investors brushed off bleak profit outlooks from companies like chip designer Transmeta Corp (news - web sites). (NasdaqNM:TMTA - news) and held out hope for a deep interest-rate cut from the Federal Reserve (news - web sites).
``The stock market is ignoring all of the bad news that is coming out, either corporate or on the economy,'' said Stanley Nabi, managing director at Credit Suisse Asset Management, which oversees about $110 billion in North America. ``There is a debate right now, quarter or a half a percentage point cut from the Fed. It's becoming more and more evident it will be a half percentage point and that might be helping the market.''
The Nasdaq composite index (^IXIC - news) gained 39.15 points, or 1.93 percent, to 2,070.39. The blue-chip Dow Jones industrial average (^DJI - news) rose 95 points, or 0.89 percent, to 10,742.33, after rising more than one percent minutes earlier. The Standard & Poor's 500 Index (^SPX - news) added 15.69 points, or 1.28 percent, to 1,238.83.
The Fed is widely expected to cut interest rates by at least 25-basis points at its policy-setting meeting next week, but many market players are hoping for a deeper 50-basis point cut. The Fed has already slashed rates five times this year -- 50 basis points each time -- to spark a recovery in the world's largest economy. |
