Troubled financial stocks continued to rally off their lows, helped by the Federal Reserve’s lower of the discount rate by 50 basis points to 5.75 percent from 6.25 percent, Investor’s Business Daily reports.
The central bank also announced other technical changes, such as lengthening the time credit would be supplied to 30 days, easing banks’ access to discount loans.
“The move by the Fed shows that they are on the scene and will do what it takes to ensure adequate liquidity,” Deutsche Bank wrote in a note to clients. “The move could be considered symbolic since it does not touch fed funds which, in turn, probably would have been more of a boon to financials.”
Financial stocks continued a heavy-volume rally begun the day before off of 52-week lows.