The news of the day was that the Federal Reserve decided to cut interest rates by 25 basis points to 4.5%. The Fed said that it believes that inflation risks and downside risks to growth are now equal. There was also one dissenter today, Thomas Hoenig, who preferred no change in the fed funds rate. If you would like to read the monetary policy press release from the FOMC, click here. Initially investors saw some pause from today's cut since it hints that this may be the last of the cuts, but after some digestion investors bid up stocks 
nicely into the close. The Dow finished higher by 137.54. The Nasdaq charged higher by 42.41. The S&P 500 rose by 18.36, or 1.2%.
The energy stocks were huge winners today, as oil charged higher, hitting another 52 week high today. The price of crude oil today closed at $94.54 a barrel, up by more than $4 from yesterday's close. As has been the case so often of late, the clearest leaders were the Chinese oil stocks. PetroChina (NYSE:PTR) and China Petrol. and Chemical (NYSE:SNP) gained 6.88% and 10.52% respectively today. Apache Corporation (NYSE:APA) led the oil and gas operations group higher, gaining 4.85% today. Encana Corporation (NYSE:ECA), the Canadian natural gas producer, gained 5.21% today and hit a new 52 week high.
The basic material stocks were another huge winner today. These stocks continue to run because of huge demand for many basic materials all around the world. Monsanto Company (NYSE:MON) gained 4.98% on the day. Potash Corporation (NYSE:POT) shares gained 3.57% and hit another new 52 week high. Barrick Gold Corporation (NYSE:ABX) led the gold mining stocks higher, gaining 4.1% today.
As you might suspect based on the strength of the Nasdaq composite, the technology stocks were also very strong today. VMware Inc. (NYSE:VMW) shares rose by 3.72% to a new 52 week high today. Electronic Arts (Nasdaq:ERTS) closed higher by 3.59% today. First Solar Inc. (Nasdaq:FSLR) gained another 6.05% today. FSLR has now gained over 95% from its August lows, and has nearly tripled in the past six months.
Today's Fed rate cut was an attempt by the Fed to put a stop to the recession fears that are still going around due to the credit market problems and the ridiculous housing market. The language of the FOMC leads me to believe that unless market action or economic indicators get a lot worse soon, they are likely to be done cutting rates for the time being. The Fed clearly has some inflation worries, and justifiably so. Oil continues to crash through new highs just as gold surges and the dollar plunges. It will be interesting to watch the commodity trading in the next few weeks to see how they respond to this rate cut.
The stock market is likely to be volatile in the coming days as more earnings news comes out and investors continue to try to digest exactly what the Fed was trying to say today.
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