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Business News - updated 7:06 PM ET Jan 4 Thursday January 4 7:06 PM ET
Tech Stocks Rise After Surprise Rate Cut
By Haitham Haddadin
NEW YORK (Reuters) - Technology stocks rose in Thursday's aftermarket, gaining back some ground lost in regular trade, after another surprise announcement from the Federal Reserve (news - web sites) that it cut the U.S. discount rate again.
The tech-heavy Nasdaq index futures rose a little on the news, which came after the end of Thursday's regular session, and then inched down. A number of bellwether high-tech stocks rose in after-hours trade, including Web gear maker Cisco Systems (NasdaqNM:CSCO - news), the most actively traded on Nasdaq and in the aftermarket.
``This rate cut is more symbolic, but it also causes a great deal of a psychological benefit to the market,'' said Art Hogan, chief market analyst at Jefferies & Co. ``We see some firmness in the market tomorrow morning, especially with the Nasdaq trying to give back some its gains today.''
Cisco rival Juniper Networks (NasdaqNM:JNPR - news), fiber-optics company JDS Uniphase (NasdaqNM:JDSU - news) and wireless technology company Qualcomm Inc (NasdaqNM:QCOM - news) -- which had led the tech-laden Nasdaq market lower on Thursday, also recovered in the aftermarket.
The central bank said in its latest announcement that it cut the discount rate, the rate it charges commercial banks for emergency loans, by a quarter percentage point to 5.5 percent.
This second surprise came hard on the heels of Wednesday's quarter-percentage-point cut in the discount rate, which was meant to underline an even more aggressive half a percentage point reduction in the key federal funds rate, the rate that banks charge each other for overnight loans. The rate cuts, rare because they occurred between meetings of the Fed's policy-making body, are intended to stop the world's largest economy from slowing more.
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