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The stock market produced its largest point gain in over 5 years today after the Federal Reserve cut the fed funds rate by 50 basis points to 4.75% and cut the discount rate by 50 basis points to 5.25%. The Dow Jones Industrial Average finished the day higher by a stunning 336 points, with about 85% of that gain coming after the 2:15 announcement. The Nasdaq Composite Average soared by 70 points. The S&P 500 actually was the strongest of the three major averages on a relative basis, it jumped by 43 points, or 2.92%.

All the major sectors were strongly higher, with even the weakest sectors finishing higher by almost 2%. Financials, basic materials, capital goods, and energy stocks led the surge higher.

The financial sector rejoiced after the news of the 50 basis point cut, which investors felt would help banks and mortgage lenders greatly. The big banks were all strongly higher on the day. Citigroup Inc. (NYSE:C) and JP Morgan Chase (NYSE:JPM) were both higher by over 5% on the day. Investment banks shares surged after positive earnings from Lehman Brothers this morning combined with the euphoria of the rate cut. Lehman Brothers Holdings (NYSE:LEH) shares rose by 10% on nearly triple their normal daily volume. Goldman Sachs Group (NYSE:GS) shares surged by 6.87% on the day as investors anticipated their earnings release due out Thursday. Insurance providers also surged today with MetLife Inc (NYSE:MET) gaining 6.35% and Principal Financial Group (NYSE:PFG) gained 6.36%.

Basic material stocks jumped, as the sector as a whole gained an astonishing 5.21%. BHP Billiton Limited (NYSE:BHP), the largest basic material company in the world, gained 6.41% on the day. United States Steel Corporation (NYSE:X) shares surged 7.19% as part of a very strong steel group.

The homebuilders have been hit harder than any other group in the market, but today was a great day for them. The group jumped higher after news of the cut led investors to hope that the worst could well be over for these companies. Hovnanian Enterprises (NYSE:HOV), which has been in the news for its huge sale from last weekend, jumped an astounding 28.42% on the day on triple its normal daily volume. Larger housing companies also did very well. Toll Brothers Inc. (NYSE:TOL) gained 8.66% on the day, while Pulte Homes Inc (NYSE:PHM) shares gained 6.28%.

There were simply too many stocks that surged on nice volume today to list them all so I felt it appropriate to list a few of the largest stocks who hit a new 52 week high today.

52 Week Highs

• Schlumberger Limited (NYSE:SLB)- gained 5.18% on the day.
• PepsiCo Inc. (NYSE:PEP) gained 1.55% on the day.
• Freeport McMoran (NYSE:FCX) gained 6.42% on the day.
• Garmin Limited (Nasdaq:GRMN) gained 4% on the day.
• Baidu.com Inc. (Nasdaq:BIDU) gained 6.29% on huge volume today.
• Research in Motion Limited (Nasdaq:RIMM) gained 4.73% today.

The market internals were nothing short of tremendous today. In fact, up volume outpaced down volume by a staggering 96% to 3% margin on the NYSE today. The volume was very high in the last hour and 45 minutes, and the Nasdaq actually went over 2 billion shares traded today for the first time in a while.

I will post later on my complete thoughts about the Federal Reserve and its historic move. To ensure you are able to view that post and other posts here at GrowYourFunds quickly and easily, you can sign up for the RSS Feed from the site.