Stocks Rally To Day Highs After Fed 3/4 Point Rate Cut

US equities are at the highs of the day after the FOMC cut interest rates 75 basis points, bringing the discount rate to 2-1/4 percent. The Fed noted that financial markets remain under considerable stress, and the tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters. The Fed said downside risks to growth remain, but they said they will act in a timely manner as needed to promote sustainable economic growth and price stability.

At 3PM ET, the Dow rallied up over 300 points. The Dow was up over 200 points most of the session after better-than-expected results from investment banks Goldman Sachs (NYSE: GS) and Lehman Bros (NYSE: LEH) showed investors that everything in i-bank land is not as bad as this weekend's Bear Stearns news would have suggested. [LJ]

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