Six Nation Rate Cut, Short Sell Ban Lifts, Markets Down

Central Banks from six economic leading nations, including the United States, launched a coordinated surprise interest rate cut this morning to bolster the world’s economies. The U.S. cut rates by 50 basis points to 1.50%.

The stock market initially surged on the news, but later pulled back into deep negative territory as rumors flew of the rate cut and rescue plan not being adequate to save the system. Stocks then rallied being led by technology and commodity names as bargain hunters triggered by unprecedented low prices in these sectors loaded up at the depressed prices.

Stocks swung wildly back and forth between positive and negative pushing the fear index VIX to an all time high. The short selling ban on many financial names will be lifted this evening. This should add tremendous liquidity to the market helping it gain traction. Option market makers and others who eat volatility are experiencing the best month of all time. Other market participants are being hit with massive losses. In the last moments today, all indexes turned negative with the DJIA down another -194.58 to 9252.53, the Nasdaq was damaged -14.55 to 1740.33 and the broad based S&P 500 which was up over 8 points, 5 minutes before the close, was smacked down -11.66 to 984.57.

Goldcorp (GG | Quote | Chart | News | PowerRating) — Surging metal prices lifted the large metal names today with GG climbing 16.75% or $4.34 to $30.24/share.

Bank of NY Mellon (MER | Quote | Chart | News | PowerRating) — Dropped 2.50% or 45 cents to $17.55/share after its third quarter loss estimate was increased by Morgan Stanley.

Safeway (SWY | Quote | Chart | News | PowerRating) — Added 3.63% or 83 cents to $23.68/share after being upgraded to hold by Jeffries Group.

Gold jumped $21.90 to $903.90, oil dropped 70 cents to $89.36 and the fear gauge index VIX hit an all time high of 59 to close at 53.68 indicating huge levels of fear.

Market Snapshot

Dow -194.58 9252.53 NASDAQ -14.55 1740.33 S&P 500 -11.66 984.57

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