Tech Stocks Soar on Historic Fed Action
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Tech stocks soared Tuesday on better than expected results from Best Buy (NYSE: BBY) and historic action on interest rates by the Federal Reserve.
The Fed slashed interest rates to near zero and pledged to continue to take extraordinary steps to try to right the credit markets in the wake of the worst financial crisis since the Great Depression.
The Fed Funds rate of a range of zero to 1/4 point is the lowest on record, while the 1/2 point discount rate matches the previous low set in 1942.
And Best Buy shares soared 18% after the company posted quarterly earnings and sales that beat Wall Street estimates, giving a welcome boost to investors worried about holiday spending amid the steepest economic downturn in decades. The news sent shares of Amazon.com (NASDAQ: AMZN) and eBay (NASDAQ: EBAY) sharply higher.
Other names topping the Nasdaq's 5.4% gain included Intel (NASDAQ: INTC), Qualcomm (NASDAQ: QCOM), Marvell (NASDAQ: MRVL), Research in Motion (NASDAQ: RIMM), Symantec (NASDAQ: SYMC) and NetApp (NASDAQ: NTAP).
Baidu (NASDAQ: BIDU) surged 12% on a Goldman Sachs upgrade.
But Apple (NASDAQ: AAPL) managed only a small gain on reports of weak Mac sales, and fell after the close on news that this will be its last year at Macworld Expo and that CEO Steve Jobs won't be giving the keynote.
Satyam (NYSE: SAY) lost half its value on plans to buy two infrastructure companies for $1.6 billion, but rebounded sharply after hours.
Conexant (NASDAQ: CNXT) tumbled after lowering its outlook and announcing the departure of its CFO.
Adobe (NASDAQ: ADBE) surged in late trading after its results hit the high end of lowered expectations.
The Nasdaq soared 81 to 1589, the S&P surged 44 to 913, and the Dow jumped 359 to 8924. Volume rose to 6.77 billion shares on the NYSE, and 2.27 billion on the Nasdaq. Advancers led by a 32-6 margin on the NYSE, and 22-6 on the Nasdaq. Upside volume was 94% on the NYSE, and 93% on the Nasdaq. New highs-new lows were 28-114 on the NYSE, and 3-99 on the Nasdaq.