Fed, Brokers Send Stocks Skyrocketing
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Better than expected results from Lehman Brothers and Goldman Sachs and a three-quarter point rate cut from the Federal Reserve went a long way toward easing fears about the credit markets and the economy on Tuesday, sending stocks to their best one-day gain in at least five years.
Lehman shares soared 46% on its results. Its shares have risen about 130% off Monday's low, when investors feared that it might be the next major investment bank to collapse after Bear Stearns. The Bear Stearns failure resulted in a historic rescue and acquisition by JP Morgan and the Federal Reserve.
Yahoo was the biggest story in the tech sector, rocketing 7% after the company raised its long-term revenue guidance and said Microsoft's takeover offer significantly undervalues the company.
Stocks doing better than the Nasdaq's 4.2% gain included Google, Dell, Intel, Apple, Cisco, eBay, Amazon, Research in Motion, Nokia and Nvidia. Intel benefited from positive comments by Goldman Sachs.
Jupitermedia, publisher of this Web site, fell 15% despite better than expected revenues, as traders focused on a $76.7 million write-down.
After the close, Adobe shares jumped on better than expected results.
The Nasdaq soared 91 to 2268, the S&P surged 54 to 1330, and the Dow soared 420 to 12,392. Volume declined to 5.52 billion shares on the NYSE, and 2.42 billion on the Nasdaq. Advancers led by a 30-3 margin on the NYSE, and 22-7 on the Nasdaq. Upside volume was 95% on the NYSE, and 92% on the Nasdaq. New highs-new lows were 28-116 on the NYSE, and 37-229 on the Nasdaq.