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Dow and Nasdaq Rally After Fed Cuts RatesAired January 3, 2001 - 1:44 a.m. ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NATALIE ALLEN, CNN ANCHOR: Speaking of gearing up, let's go to Rhonda Schaffler, where the Dow, the Nasdaq have done just that, after this announcement from Alan Greenspan.
RHONDA SCHAFFLER, CNN CORRESPONDENT: Hi, Natalie. I am not sure if you can hear me. I'm having trouble hearing you at the moment. But we just want to keep you updated on the markets here. Stocks are surging after this surprise move by the Federal Reserve which came just about a half-hour ago. The Federal Reserve cutting the Federal fund's rate by a half of a percentage rate and that's the overnight rate. Banks charge each other for loans overnight.
A lot of things are tied to this, everything from consumer loans to mortgages. The Fed also cutting the discount rate by a quarter percentage point. And the last time the Federal Reserve cut rates in between meetings was October of 1998.
As far as how the Dow Jones industrial average is holding up: Since this move came out, the Dow is up 301 points, and the interest rates and the financial stocks are climbing. Shares of J.P. Morgan and Chase are up more than 4, Citigroup is up almost 4, American Express is climbing about 5, IBM and (UNINTELLIGIBLE) the top gainer right now, it is up more than $8.
The Nasdaq composite is sharply higher. The Nasdaq is up 259 points now at 2,551, a gain of about 11 percent. The credit market at first shot up after the news came out from the Fed, but we are seeing a bit a pullback. Yield still, though, hovering close to two-year lows. The ten-year Treasury note down 14 ticks. (UNINTELLIGIBLE) right now.
And that is the latest from the floor of the New York Stock Exchange. Let's go back to Atlanta.
LOU WATERS, CNN ANCHOR: OK, Rhonda.
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