Stocks Surge After Fed Rate Cut

Stocks jumped significantly higher after the opening, following a rate cut from the Federal Reserve. The averages gave back roughly half of their early gains by 10:30 but have steadily moved upward.

The Fed cut the discount rate by half of a percentage point prior to the opening bell on Friday, signaling a rally to start the session. The rate cut was designed to inject liquidity into the cash-strapped markets, and to boost investor optimism.

Crude oil futures for September delivery added 1.4% to $71.98 a barrel on news that a hurricane headed toward the Gulf of Mexico may threaten rigs and pipelines. Gold futures for December delivery added 1.3% to $666.80 an ounce.

Around Europe, the U.K.'s FTSE 100 index climbed 3.50% to 6,064.20, while France's CAC 40 index surged up 1.86% to 5,363.63 and Germany's DAX index rose 1.49% to 7,378.29.

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Darren Wong
Associate Editor
darrenw@tradingmarkets.com

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