Nice Day for the Market...

U.S. Markets

Dow +420.41 (+3.51%)
Nasdaq +91.25 (+4.19%)
S&P 500 +54.14 (+4.24%)

News That Moved the Market

Markets Sizzles With More Confidence In Financials. Markets began the session with healthy gains after both Goldman Sachs (GS, +16.3%) and Lehman (LEH, +43.3%) reported better than expected quarters and reassured investors that they were well capitalized. Heading into the FOMC announcement, the Dow was up nearly 300 points. The Fed's decision to cut rates by 75 basis points caused a sell-off, as most expected a full-point cut, but the markets quickly recovered and finished the day at new highs.

Fed Details. The Fed cut both the fed funds rate and discount rate by 75 basis points to 2.25% and 2.50%, respectively. Two members voted against the cut, Dallas Fed President Fisher and Philadelphia Fed President Plosser, who preferred easing less. The statement acknowledged the uncertainty surrounding inflation, but said it expects inflation to moderate over time, keeping the door for further cuts if necessary. The Fed also assured that it will act in a timely manner if more price instability creeps up.

Quick Tics:

The Financial Sector increased 8.5% on the day, its largest jump in 8 years...

Adobe (ADBE, +3.4% day; +4.7% A.H.) reported sales jumped 37% and affirmed revenue would increase 13% this year…

Housing starts fell 0.6% last month, which was better than economists expected...

Bear Stearn's (BSC, +22.9%) jumped after more stockholders hinted they would vote against the JP Morgan (JPM, +6.0%) buyout.

Tomorrow Notable Earnings:

General Mills, Inc.(GIS) Before Open
Morgan Stanley (MS) Before Open
Nike (NKE) After Close

Economic Events:

10:30 AM: Crude Inventories