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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Dealer who wrote (35956)	4/18/2001 11:59:51 AM
From: stockman_scott	Respond to of 65232

Stocks Skyrocket After Surprise Rate Cut Wednesday April 18, 11:49 am Eastern Time By Haitham Haddadin <<NEW YORK (Reuters) - Stocks skyrocketed in late morning trading on Wednesday, sending the tech-heavy Nasdaq well above 2,000 for the first time in more than a month, after the Federal Reserve shocked the market with a surprise interest-rate cut of half a percentage point. The Fed move came in between scheduled meetings of the powerful central bank and was the fourth time that it cut rates this year to kick-start the nation's sluggish economy. ``That is a shock. That is a nice surprise,'' said Bill O'Hearn, senior portfolio manager at Valentine Capital. ``You'll see this market probably take off. Obviously, lower rates are going to help. They are going to help spur a lot more spending.'' The technology-laced Nasdaq Composite Index (.IXIC) surged 162 points, or 8.44 percent, to 2,085. The blue-chip Dow Jones industrial average (.DJI) jumped 414 points, or 4.05 percent, to 10,630 and the broader Standard & Poor's 500 Index (.SPX) climbed 47 points, or 3.97 percent, to 1,239. The indexes nearly doubled an early rally led by technology issues as investors were emboldened by better-than-expected quarterly profit reports from Intel Corp. (NasdaqNM:INTC - news) and other marquee names. The Fed lowered the bellwether federal funds rate, charged for overnight lending between banks, by 50 basis points to 4.50 percent. The Fed also cut the more symbolic discount rate, charged for emergency Federal Reserve loans to banks, by 50 basis points to 4.0 percent. That brings the total reduction in rates so far this year to 200 basis points. Upbeat earnings news came from AOL Time Warner Inc. (NYSE:AOL - news), the world's largest Internet and media company, which bucked the recent industry trend of gloomy results by reporting higher first-quarter earnings early on Wednesday. AOL Time Warner, the most active issue on the New York Stock Exchange, leaped $4.62 to $48.52. ``There are some good things happening in the market ... It certainly is in that bottoming process,'' said Barry Hyman, chief investment strategist at Ehrenkrantz King Nussbaum. ''You are getting some key numbers beating Street estimates and that's a good sign.'' The central bank surprised financial markets with a 50- basis-point rate cut on Jan. 3, outside of a regular Fed meeting, then lowered by another 50 basis points at its last scheduled meeting on Jan. 31. The Fed last cut rates by 50 basis points on March 20, disappointing investors who had hoped for a steep 75-basis-point cut as the market suffered fierce sell-offs. The Fed, which meets next in May, said in a statement that this rate cut was based in part on softening capital investment, erosion of current and future profits and rising uncertainty in business outlook. It also cited a ``reduction in equity wealth on consumption'' and risk of slower growth abroad. ``Uncertainty about the business outlook has pushed the Fed's hand. It's being viewed as an extreme positive for the markets,'' said Bryan Piskorowski, analyst at Prudential Securities. ``It's definitely a surprise.'' Some fund managers, however, were cautious about the sudden Fed easing, saying it may signal something ugly out there. ``That's a surprise. There must be some other shoe waiting to drop I'd say,'' said Richard Babson, president of Babson-United Investment Advisors, which manages $1.8 billion. ``It doesn't seem like there's been a problem with liquidity so far, so I'd say maybe they are concerned about the darkening prospects for corporate balance sheets or corporate debt,'' he said. ``There may also be some greater exposure than already thought to Japan.'' Soft demand for semiconductors left Intel's first-quarter net income down a whopping 82 percent year-on-year, but the results issued after Tuesday's close beat Street estimates. The world's No. 1 computer chip maker also offered upbeat comments about the second half. Intel saw some ``good signs toward the end of the quarter,'' the company's chief financial officer said late on Tuesday, expressing confidence the second half would be strong. Intel shares were the most active on the Nasdaq, shooting up $4.89 to $30.93.>>

To: Dealer who wrote (35956)	4/18/2001 12:10:46 PM
From: DiB	Respond to of 65232

I think it is. Naz gapped up today above the 2000 level BEFORE the rate cut... The FED saw tame inflation yesterday and pulled the trigger... There will probably be about 3 billion shares traded today on the NAZ, with options expirations tomorrow and huge short interest... The guy at MSDW told me three days ago that the NAZ will rally to 2900 up to July, - I did not believe him... He had some TA and macro reasons...