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Current DateTime: 08:41:22 04 Jul 2009
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Current DateTime: 08:41:22 04 Jul 2009
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By: Jeff Cox | 31 Oct 2007 | 05:44 PM ET
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Stocks closed up sharply following the latest interest-rate cuts by the Federal Reserve, ending the month of October on a strong note.

The market initially plunged after the Fed decision was announced at 2:15 pm but soon recovered and rallied strongly.

"The initial market reaction, especially with a dissent in there, is 'Hey don't count on a series of cuts.' That's why we had a pullback in stocks," said Scott Wren, senior equity strategist at A.G. Edwards & Sons in St. Louis.

Major U.S. Indexes
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For the month of October, the Dow Jones Industrial Average rose 0.25%. The Nasdaq rose 5.83% for the month, and the S&P 500 rose 1.48%.

While the news was not unanimously positive - the dollar continued to crumble and oil found a new record after inventories for the month posted a startling drop - investors found reason to believe the US economy was at least holding its ground.

"The general consensus is that we'll get the Fed out of the way and then we can go back to focusing on things that matter a little more to the market, which is what's happening to the overall market situation," said David Twibell, president of wealth management for Denver-based Colorado Capital Bank. "No matter how you slice it, it certainly doesn't show that we're heading into a recession."

Credit card companies were faring particularly well, as Mastercard International [MA  Loading...      ()   ] earnings came in significantly stronger than expected and its shares surged.

Google [GOOG  Loading...      ()   ], meanwhile, found a new high of its own by breaking the $700 barrier, and McKesson [MCK  Loading...      ()   ] shares soared to their highest in years after the company posted strong earnings after the bell Tuesday.

Clorox [CLX  Loading...      ()   ] posted a lower quarterly profit as higher costs offset sales growth in its higher-margin businesses. Clorox, which makes Glad plastic bags and its namesake bleach, said net profit was $111 million, or 76 cents a share, in the fiscal first quarter ended Sept. 30, compared with $112 million, or 73 cents a share, a year earlier. Shares edged upward in premarket trading.

Among others reporting earnings before the bell, Kraft [KFT  Loading...      ()   ] posted a 20-percent drop in quarterly profit, hit by soaring dairy costs, though sales and earnings still beat analysts estimates. Shares edged up early. Master Card's  profit rose, helped by the partial sale of an investment in Brazil. Earnings were $2.31 a share, blowing past estimates of $1.42 per share.

Wyndham Worldwide [WYN  Loading...      ()   ] posted earnings of 75 cents per share. Wall Street analysts, on average, were expecting the company to post earnings of 72 cents per share.

Constellation Energy [CEG  Loading...      ()   ] said that third-quarter earnings fell, hurt by credits to residential customers, along with higher operations and maintenance costs. Earnings per share of $1.45 missed analyst estimates of $1.54.

And the world's third-largest pharmaceutical company, Sanofi-Aventis, raised the 2007 outlook on the back of strong third-quarter profit, pushed up by vaccines sales and cost cuts.

The Volatility Index [VIX  Loading...      ()   ] remained high amid continued uncertainty over the effects of the credit crunch.

© 2009 CNBC.com
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