Still Riding the Rate-Cut Wave

U.S. stocks climbed for the second consecutive day Wednesday in the wake of the Federal Reserve’s half-point interest rate cut, as all three major indexes remained in the black from the opening bell.

The Dow Jones rose 76 points to 13816, the Nasdaq gained 15 points to 2666 and the S&P 500 was up 9 points to 1529 – a one-day increase of 0.6 percent for each index.

On Tuesday stocks soared after the Fed announced a half-point reduction in the overnight lending rate to 4.75 percent. Wall Street’s reaction was immediate and positive, with the Dow rising 2.5 percent and the tech-heavy Nasdaq another 2.7 percent, respectively.

Obviously the exuberance could dissipate in the face of disappointing economic or political news, but for now the Federal Reserve’s gambit is just what Wall Street has needed.

Several major tech stocks were among Wednesday’s gainers, including chipmaker Intel, whose shares rose 26 cents, or 1.0 percent, to $25.67. Intel made several product announcements Tuesday at Intel Developer Forum in San Francisco. Also, investment bank Cowen & Co. on Wednesday reiterated Intel’s stock as an outperform.

Server vendor Sun Microsystems inched up 4 cents, or 0.7 percent, to $5.82. It was Sun’s second day of gains since announcing Tuesday the next major version of its open source Java enterprise application server.

Oracle climbed 11 cents, or 0.5 percent, to $20.84 after the database vendor announced on Wednesday morning the launching of new business process analysis software. And like Intel, Oracle received a nod from Cowen & Co., which reiterated ORCL’s outperform rating.

Shares of LightPath Technologies plummeted $1.05, or 22.1 percent, to $3.70 on Wednesday after optical products vendor reported a 33 percent decline in revenues for the fourth quarter from Q4 2006. LightPath’s CEO left the company on Tuesday.

Apple dipped 13 cents, or 0.1 percent, to $140.79. The company announced it would begin selling the iPhone in Germany on Nov. 9.

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