The Federal Reserve has just announced that it has approved a 50 basis point cut in the Fed Funds Rate as well as a 50 basis point cut in the Discount Rate. The stock market is responding in a huge way to the news, jumping higher the instant the announcement was made.
The Dow went from being up 60 points prior to the announcement to now being up over 200 points less than 3 minutes later. 
The Federal Reserve said in its statement "Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time," The Fed also said that tightening credit conditions has the potential to intensify the housing correction and further restrain economic growth more generally.
The stocks that are moving the most since the rate cut are the stocks that have been hurt the most from the mortgage and credit crisis. These companies are likely to benefit more than anyone else from this surprisingly large rate cut.
Washington Mutual (NYSE:WM) shares have jumped by over 3% just since the Fed moved. Beaten up housing stocks are also popping, jumping higher after being lower before the announcement. Lennar Corporation (NYSE:LEN) shares are now higher by 2% after being down by 1% earlier. Investment banking companies shares are also surging after the news. Goldman Sachs (NYSE:GS) is now higher by over 8 points, or 4.33%. Merrill Lynch (NYSE:MER) now trades higher by 3% on the day.
General Electric (NYSE:GE) is now higher by 2.71% to a new 52 week high in response to the Fed rate cut.
Later on tonight I will post a full review of the day and provide my thoughts about the Fed's interest rate move.
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