Bulls Charge In Approval Of Rate Cut

Stocks roared forward to record peaks Thursday as Wall Street gave a bullish reception to the Federal Reserve’s interest rate reduction.

The Dow Jones industrial average easily notched another new high by rising 48.77 points past the prior session’s record to 4,664.00.

Other popular market barometers joined the Dow in closing at unprecedented levels.

Gainers outdistanced losers by a large margin and a late New York Stock Exchange tally showed 1,686 issues up, 676 down and 650 unchanged.

Volume swelled as investors flocked to equities after the Federal Reserve disclosed that its policy panel decided to trim the federal funds rate by one-quarter of a percentage point. As of 4 p.m. Eastern time, 420.48 million shares had changed hands on the Big Board’s floor.

The stunning rallies in stocks and bonds surprised some analysts who said investors must feel further rate cuts are coming in the near future.

“The reaction is far greater in the markets than I would have expected,” said Hugh Johnson, chief investment officer of First Albany Corp.

Some of the stocks that moved substantially or traded heavily:

NYSE

Ann Taylor Stores, down 3-1/8 to 20-1/2.

The apparel retailer’s June sales disappointed investors. Ann Taylor said if current sales trends continue through July, it could post a loss of eight cents to 12 cents a share in its fiscal second quarter. Other retailers reporting June sales that traded actively included Wal-Mart Stores, up 1/2 to 27, and Home Depot, up 7/8 to 42-1/2.

Telefonos de Mexico, up 1-1/2 to 31-7/8 in NYSE-leading volume of more than 11.4 million shares.

Recent strength in Mexico’s stock market as the country’s longterm economic prospects improve, combined with a rebound in the peso, has revived buying interest in shares of Mexican companies traded in the United States.

Micron Technology, up 2-3/8 to 55.

Technology issues were among the stocks leading the market higher amid expectations that earnings of computer and related companies will benefit from a reviving economy. Also active on the NYSE, Motorola rose 1-1/4 to 70-1/4 and IBM rose 2-1/8 to 98-7/8.

NASDAQ

Microsoft, up 2 1-16 to 92-3/4.

The stock was active as news emerged that Microsoft has formed an alliance with Chemical Banking to offer customers home banking through its Money personal finance software - Microsoft’s first big move to push Money since its failed attempt to buy competitor Intuit.