Federal Reserve Chairman Alan Greenspan's midweek rate cut, however, is a cinch for Wall Street's all-time favorite. The dilemma for investors is deciding whether the rally is the start of a new bull market or a bear trap. But other Wall Streeters say betting against lower interest rates and positive earnings surprises risks missing the gains of a nascent bull market. Agreement came from many quarters. Short sellers who had bet that the market would fall further reversed course.
Investors seem ready to reward even scant good news about profits.
They started by shrugging off news from Cisco Systems that sales for the quarter would fall as much as 30 percent. Wednesday, they rewarded marginally good news from Intel that sales bettered analysts' reduced expectations. Upbeat reports from Microsoft, Apple, and others were richly rewarded. If history is a guide, timing is right for a rally. Since 1962, stocks have hit bottom three months, on average, after the Fed began cutting rates.