U.S. stocks soar despite rate hike

The Fed raised overnight
interbank lending to 5.5% from
5.25%. It also raised the rate
at which banks pay to borrow from
the fed to 5% from 4.75%. There was
some evidence that inflation was
showing, particularly in the energy
sector, so the quarter-point gain
was a cautionary move. In any case,
the speculation is over, and the
certainty played well for stocks.

The Dow jumped by 171.58 to
10,932.33. It was a broad gain
that was lead by the interest-rate
sensitive bank stocks. Nasdaq
gained 73.53, to 3,293.07. It was
lead by surges in stocks such as
Yahoo, which swelled by
US$7.06 to $212.06, and AOL,
which added $5.94, to $157.38. The
S&P also jumped by 25.63, to
1,420.02.

The Canadian market didn’t react
as well. The TSE lost 20.43 on the
day, closing at 7,579.79. Only four
of the 14 subsectors gained ground.
The biggest losers were the banks,
which dropped some of the share-
price they’d made earlier in the
week. Bank of Montreal
dropped C$2 to 55.50. Scotiabank
slipped by 70 cents to $32.90, and
CIBC inched down by 55¢ to
$35.15.

Corel continued to react
well to Microsoft’s fortunes
in the US courts. The software
company, which sells a competing
operating system, gained C$1.80 to
close at $16.70. Nortel also
swung up by $2.30, to $112.00

The ME dropped by 26.25, to
3,944.45. Alberta gained 18.19,
to 2,975.57 The VSE was up by
two points.