The Federal Reserve on Tuesday reduced interest rates by half a percentage point in the fifth cut this year, raising investors' hopes that the economy and earnings will turn around in the second half of the year. In heavy, late afternoon trading, the Dow Jones industrial average soared 343.15 to 11,216.12, closing above the 11,000 level for the first time since Sept. 14. Analysts attributed the sharp upturn largely to professional money managers putting the cash they have been holding onto back into the market. The economy will recover. Even as many big companies are still announcing layoffs and other cost-cutting efforts, Pradilla said the economy does have some brighter spots.
Housing is still very strong.
We are seeing some strong auto sales. This is not an economy that is in a rout, and we are going to see some positive things from what the Fed is doing. Historically, the market's major indexes turn higher about six months after the Federal Reserve starts to lower interest rates. The central bank made its first cut Jan. 3. All rights Reserved.