The Federal Reserve cut the overnight fed funds target to 1.25 percent today, a 50 basis points cut (a half percentage point), in an effort to help boost the economy. A cut was expected since the CCI figures showed consumer confidence took a plunge in October, but the 50 basis points cut was considered extra special by a Wall Street already ebullient over the Republican Coup in yesterdayis elections, and the departure of Harvey Pitt as SEC Chairman. Put all this together and you get a market that went into rally mode in afternoon trading.
The Dow Jones Industrial Average ended at 8,771.01, a gain of 92.74 (1.07%). The S&P 500 Index finished at 923.76, higher by 8.37 (0.91%), and the NASDAQ Composite Index rose to 1,418.99, a gain of 17.82 (1.27%). Apple also rose today, closing higher at 17.22, a gain of 0.32 (1.89%), on moderately low volume of 3,848,104 shares trading hands.
That closing price is the first time since July 16th of this year that AAPL has closed above the US$17 mark (US$17.86), making todayis close a 16-week high. In addition to the tech rally sparked by the above-mentioned market factors, Appleis new portable announcements helped boost Appleis stock. Apple announced faster PowerBook G4s, as well as faster iBooks, and cut the price on both. The markets reacted positively to the news. From a Forbes.com article:
Rumors sites had been buzzing for days about the updates to the iBook. Retailers and other Apple resellers had basically run out of iBooks, which is the classic sign that an update is imminent. The changes to the iBook line are somewhat routine for an Apple upgrade. There are faster G3 processor chips in all three machines, with clock speeds ranging from 700 megahertz to 800 megahertz. The two lower-end machines have 12.1-inch thin film transistor displays. The higher-end iBook has a 14.1-inch display. All three have a Radeon 7500 graphics controller from ATI.
But the surprise of the day came on the high end of Appleis notebook line. Its Titanium PowerBook notebooks, arguably the best notebook ever made, received a nice boost today as well. On the processor side, the machine now boasts a 1 gigahertz PowerPC G4 processor made by Motorola. But the other big news is the addition of a DVD-burning SuperDrive to the machine. Previously, the best optical drive you could get on a PowerBook was one that could play DVDs but could only record data to CD-R and CD-RW discs.
Appleis stock traded in moderately low volume with only 3,848,104 trading hands, but the 1.89% gain is a strong one for the company. Wall Street will be looking at whether the updates can boost Appleis sales for the holiday buying season, at which the low-end model starting at US$999 seems specifically aimed.