aggressive interest rate cut

Casting aside 拋棄 any hesitation about an aggressive interest rate cut, investors sent stocks soaring to their highest gains in five years on Tuesday as shares of financial firms surged 高漲 in the hopes that the Federal Reserve has finally taken hold of 抓握 the credit crisis. The Dow Jones industrial average gained 420 points.

[Tim lost hold of the rope and fell to the ground. David has a good hold on physics; David is good at physics. Japan has a firm hold on the complex issues; Japan has a complete control on the complex issues.]

The surge began at the opening bell after two big investment banks, Lehman Brothers and Goldman Sachs, delivered stronger-than-expected earnings. It faltered 衰退 only briefly after the Fed’s announcement in the afternoon that it would cut its benchmark interest rate by three-quarters of a point, with the Dow tacking 增補 on nearly 300 points in the final hour and a half.

The rally capped 勝過;超過 a week of extraordinary efforts on the part of the central bank to restore confidence to financial markets after the near collapse of Bear Stearns, one of Wall Street’s most venerable investment banks.

The three-quarter point cut amounted to a strong dose of financial adrenaline, though some investors had expected an even deeper cut.

But as stock investors enjoyed the euphoria, ominous 不祥的 signs appeared elsewhere in the market. Widening spreads on mortgage and short-term debt indicated that the Fed’s actions may not have cut to the heart of the current crisis: the lack of willingness among financial institutions to lend to one another.

Shares of financial firms, however, continued to surge in late trading as they recovered from a severe beating on Monday. Lehman Brothers, whose share price plummeted 19 percent a day earlier as rumors swirled 打旋; 紛亂 that the bank was facing liquidity problems, gained back all its losses after reporting a 57 percent decline in net income for the first quarter.

Goldman Sachs reported a 53 percent earnings decline, also better than Wall Street estimates, and its shares rose 16 percent, to $175.59. MF Global, the commodities brokerage firm that plummeted in value on Monday, gained back 35 percent, to $8.17.

The Fed’s cut to its benchmark lending rate will lower the cost of mortgages, car loans, and other consumer transactions. But it can also lead to higher prices and a devalued dollar.

“It’s a mild recovery and it’s a logical response to yesterday’s hard sell-off. In general the fundamentals on many commodities remain sound despite jitters 緊張不安 over global financial markets,” said Joel Crane, a commodities strategist at Deutsche Bank.

Crude oil gained to settle at $109.42 a barrel. Gold fell below $1,000 a troy ounce and the dollar gained ground against the euro, which settled at $1.5630.

The bounce on Wall Street followed strong sessions in foreign stock markets, which recovered on the strength of banks and financial services firms.

Dow Surges 420 Points on Fed Rate Cut and Earnings New York Times Published: March 18, 2008