Stocks in New York rose sharply yesterday, with the Dow industrials adding more than 100 points to a 330-point rally sparked by Thursday's surprise interest rate cut at the Federal Reserve.
The Dow Jones industrial average, which only last week was flirting with its summertime low of 7,400, rose 117.40 points - or by 1.41 per cent - at 8,416.76.
While still about 900 points below the July 17th record of 9,337.97, the Dow is suddenly showing a respectable gain of 500 Broader stock indexes also extended Thursday's rally to reach the highest level since before the late August plunge.
The Dow, which surged 4.2 per cent on Thursday, notched its best finish since August 26th, one day before the summer sell-off began accelerating with a 357-point plunge and five days before its climactic 512-point drop.
Stocks rallied late Thursday as Fed officials, clearly worried about instability in the global economy and financial system, surprised the market by not waiting for one of their regular strategy meetings to make a change in the central bank's short-term lending rates.
The reduction in two key rates came less than three weeks after the last Fed policy meeting, which produced the first rate cut in nearly three years.
The news came with less than an hour left in Thursday's session, but the Dow tripled its gain by the closing bell to 330.58, the third biggest point-gain ever.
Helping fuel yesterday's advance were more signs that economic activity is still not proceeding at an inflationary pace, bolstering hopes that the Fed will cut rates again in November.
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