The Federal Reserve's interest rate cut helped the stave off a huge drop the stock market yesterday. Though the Dow Jones did fall 465 points at one point, it ended 128 points down. Another feature of the rate cut: Home loan applications jumped.
The global markets had tumbled on Monday (during the U.S. Martin Luther King Jr. Day holiday) because of U.S. recession fears, but Asian markets gained a little today after news of the interest rate cut. The Euopean markets are faring as well, as the European Central Bank did not announce a rate cut.
One concern for today is that weak earnings from Apple and Motorola will drive the market down. Sure, Apple's revenue rose 17%, shipments of iPods and other devices were lower than forecasts.
And the chief investment officer of Neuberger Berman, Jack Rivkin, told Bloomberg Televion, "I don't think the market has priced in a recession. I would say that we're already in a recession. Odds are earnings are going to be down for 2008.''
