Fed Cuts Rate, Dow Dives
The markets have been extremely choppy recently, and investors were looking to Tuesday’s Fed meeting for a rate cut to boost liquidity in the markets, and boost stocks. A .25% cut was expected, but more was hoped for. Unfortunately for investors–at least in the short term–the markets were less than thrilled with the results, and plunged on the news. In the hours leading up to the announcement, American markets were up slightly, as investors tentatively awaited the news. As soon as it broke, the selling began. The Dow finished down almost 300 points, the Nasdaq down 66, and the S&P was off by 38.
Hit especially hard were homebuilders and lenders. In the homebuilders sector, LEN, DHI, and HOV were all slammed with double digit losses. Financial institutions such as MER and LEH fell significantly also.
If investors can take any good news from the meeting, it’s that the Fed all but stated that more cuts were on the way in the next meeting. Unfortunately, that meeting isn’t until late Jan.
