Yesterday’s unexpected rate cut sparked huge rally in techs but investors could be poised to pull back Thursday. The major markets in Asia and Europe were mixed and the Dow is set to open lower.
In a surprise move, the Federal Reserve Board cut short-term interest rates by a half percentage point Wednesday afternoon. The U.S. markets rallied on the news with the Nasdaq composite storming up 14 percent, or 325 points – both one-day records - to 2,616.52. The Dow added 299.60 points to 10,945.75.
Early indicators Thursday show that the markets are poised to fall. While pleased with the cut, the jury is still out on whether the markets can sustain a rally or retreat to its recent gloominess, fuelled by slowed manufacturing, reduced capital spending and corporate warnings.
Qualcomm (Nasdaq: QCOM) said its has inked a digital wireless technology licensing deal with GBase Communications to develop, manufacture and sell wireless infrastructure equipment.
After the bell yesterday, enterprise software developer BMC Software (Nasdaq: BMCS) said it will beat expectations for its third quarter, bucking the recent warnings trend.
Expect the following technology stocks to be among Thursday’s most actively traded issues: Inktomi (Nasdaq: INKT), Resonate (Nasdaq: RSNT) and Vitria (Nasdaq: VITR).
The Nasdaq gained 324.83 to 2,616.69 on Wednesday while the Dow Jones industrial average gained 299.60 to 10,945.75.
At the Bell
The Dow Jones industrial average is expected to open down 47.7 points. The Standard & Poor's 500 futures index slipped 5.90 to 1353.30 at 7:23 a.m. EST.
The Inter@ctive Week @Net Index rose 52 to 297.75.
The major Asian markets were mixed. The Nikkei 225 slipped 94.20 to 13,691.49. Hong Kong’s Hang Seng and Singapore's Strait Times gained ground, rising 645.45 to 15,235.03 and 59.23 to 1920.75, respectively.
European markets were uncertain as well. London's FTSE 100 gained 145 to 6,184.90 and the CAC 40 in Paris moved up 138.03 to 5,822.08. The DAX in Frankfurt was down 17.89 to 6417.07 at 7:10 a.m. EST.
Reuters contributed to this report.