Wall Street Rallies on Fed Minutes
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

Wall Street advanced sharply today as investors interpreted minutes from the Federal Reserve’s last meeting as indicating the central bank is ready to keep cutting interest rates to boost the economy. The Dow Jones industrial average rose 120 points to a new record close.
The minutes from the Federal Open Market Committee’s September 18 meeting, when Fed governors voted unanimously to cut rates a half percentage point, also showed that officials were concerned that the weakness in the dollar could lead to higher inflation. But the Fed — signaling it is more willing to intervene — also said that the economic outlook was uncertain because of the summer’s credit crisis, and that there were still risks to growth that justified lower rates.
The major indexes were little changed just before the minutes came out, and then rose sharply. Investors were hoping that the Fed would lean toward future rate cuts; central bankers will meet again October 30 and 31.
“This adds fuel to the fire that the Fed is going to try and reinvigorate the economy with further cuts, and that’s what they are committed to,” a chief market strategist for Stifel Nicolaus, Richard Cripps, said. “The likelihood of having a second cut either this month or at the December meeting seems greater than before the minutes.”
Further, the president of the Federal Reserve Bank of St. Louis, William Poole, said during a speech today that he believes the financial markets are “still fragile” from weakening credit conditions, but that it appears to be stabilizing. He pointed out that the fallout in the subprime mortgage sector, where mortgages are issued to homebuyers with poor credit, was one of the catalysts to financial market turmoil
According to preliminary calculations, the Dow rose 120.80, or 0.86%, to 14,164.53, eclipsing the previous record close of 14,087.55 reached October 1. The Dow had a new trading high as well, rising to 14,166.97.
Broader stock indicators also advanced. The Standard & Poor’s 500 index rose 12.57, or 0.81%, to 1,565.15, and the Nasdaq composite index rose 16.54, or 0.59%, 2,803.91.