MSNBC: "Stocks surge after Fed cuts rates"..."economy is getting back on track"

[Amerigo Vespucci]

Stocks close higher after Fed’s rate cuts
Dow gains more than 130 points; Fed says risk to markets is lower

http://www.msnbc.msn.com/id/3683270/

updated 1:49 p.m. PT, Wed., Oct. 31, 2007

NEW YORK - Wall Street bounded higher Wednesday after the Federal Reserve lowered interest rates as expected and said risks to the financial markets from the summer's credit crisis have eased. The Dow Jones industrial average gained more than 130 points on the day.

Stocks zigzagged in the minutes after the Fed's decision as some observers read comments from the central bank as indicating further rate reductions are less likely. However, investors appeared relieved that the Fed's comments about the inflation — a perennial concern — signaled the central bank was able to return to somewhat more parochial worries and focus less about upheaval in the credit markets than when it met last month.

Investors, businesses and consumers alike will be getting cheaper access to cash because of the Fed's quarter-point rate cut, and that likely gave stocks a boost. The fed funds rate now stands at 4.50 percent. Last month, the Fed surprised the market with a larger-than-expected half-point cut in the funds rate.

"A rather stingy Fed suggests that they see an economy that is in pretty good shape," said Bruce McCain, head of the investment strategy team for Key Private Bank. "They're saying now we can turn back to the issue of inflation and implicit in that is that the economy is getting back on track," he said.

[JeffR]

1. Wow, it's like magic.

The talking points were obviously ready in advance, absent any data or empirical observation of any kind, save a 130-point gain in a volatile Dow.

Is everyone named McCain an asshat, or is it merely coincidence?

[angstlessk]

2. So now the middle class can resume charging food and gas on their

credit cards??? not to worry?

[ginchinchili]

3. The credit problem still has to work itself out.

Inflation is still a concern and credit is still a concern. In my opinion there is still a bumpy stretch of road ahead before we're comfortably cruising again.

[tanyev]

4. Hallelujah! Believe in the faith-based economy and all will be well!

Can I get an amen?

[Xipe Totec]

5. Finance is getting back on track

The market is another mater.

We will see what we will see...

[calteacherguy]

6. The economy is healthy, and the fed is doing the right thing. nt

[Amerigo Vespucci]

7. Healthy?

I spoke with a potential client yesterday who needs a Web Site to promote her business and she told me "I'm barely going to be able to make the rent his month." She owns and operates a restaurant.

Healthy?

[calteacherguy]

10. The position of your client is certainly not reflective of the U.S. economy. nt

[TalkingDog]

12. You've got a point. A majority of Americans aren't well off enough to even own a business.

Things must be really bad.

My Favorite Master Artist: Karen Parker GhostWoman Studios

[Warpy]

8. Any bets on how low the dollar will go now?

Lowering rates is just sacrificing the dollar at this point.

Sacrifice enough value, China will finally allow the Yuan to float against the dollar and all hell will break loose.

[OHdem10]

9. The Big Disconnect---What is good for Wall Street is not always

good for Main Street.

[jimshoes]

11. The Canadian Dollar is worth more than

a US dollar and things are better? Better than what?