Fed Rate Cut Sends Stocks Soaring

The Federal Reserve approved a half-percentage point cut in its discount rate on loans to banks, a dramatic move designed to stabilize financial markets rolled by a widening credit crisis. The action sent stocks soaring, with the Dow Jones Industrial average up more than 300 points right after the opening bell. The blue chip index finished the day up 233.30 points at l3,079.08. The decision means that the discount rate, the interest rate the Fed charges to make direct loans to banks, will be lowered from 6.25 percent to 5.75 percent.