IBD's Top 10 - Tuesday

Fed Slashes Rates By Half Point

1 Citing fears that housing and credit market woes could hurt the economy, the Fed cut its fed funds rate by 50 basis points to 4.75%, more than many expected. It also cut its discount rate by a half point 15 5.25%. "Today's action is intended to help forestall some of the adverse effects on the broader economy," the Fed said. They added they "will act as needed."

Stocks Surge On Fed's Rate Cut

2 The major indexes made their best gains of the year, exploding after the Fed's announcement. The NYSE composite shot up 3.1%, the S&P 500 2.9%, the Nasdaq 2.7% and the Dow 2.5%. The small-cap S&P 600 roared 3.7%. Volume skyrocketed, more good news for the broad advance. Long-term Treasury yields edged up, but short-term yields fell sharply.

Lehman Bros. Soars On Q3 Beat

3 The investment bank's profit slid 2% to $1.54 a share, but beat $1.47 views. Revenue grew 3% to $4.3 bil. Lehman Bros. LEH signaled fin'l woes' worst may be past. Fixed-income revenue dived 47%, but equities, investment banking and asset management were strong. Lehman shares shot up 10%. Other brokers also rose.

Best Buy Jumps On Higher Profit

4 The top U.S. consumer electronics retailer said Q2 profit rose 17% to 55 cents a share, beating views by 11 cents. Sales grew 15% to $8.75 bil, above views. Best Buy BBY credited strong int'l sales and high demand for laptops, flat-panel TVs and video games. The retailer raised its full-year EPS outlook to the top half of its $3-$3.15 range vs. views of $3.03. Best Buy shares rose 6.5%.

Oil, Metals Surge; Dollar Swoons

5 The Fed's rate cut improved the economic outlook, which means more demand for oil and metals. October crude shot up 94 cents to $81.51, a new record, while December copper gained 2.80 cents to $3.4480 a pound. The front gold contract leapt to its highest in 16 months. But low yields hurt the buck: The Canadian dollar soared to a 30-year high, and the euro hit a record.

Foreclosures Rose 115% In Aug.

6 Home foreclosure filings surged vs. Aug. '06 to 243,947, the highest since RealtyTrac began tracking data in Jan. '05. In Nevada, foreclosures are underway in 1 in 165 homes. Calif. has the 2nd-highest rate at 1 in 243 homes and boasts the 3 highest metro foreclosure rates. Separately, a home builders' sentiment index fell 2 points in Sept. to 20, matching the record low set in Jan. '91.

Lenders Continue To Struggle

7 NovaStar NFI dropped its REIT status as it halted its dividend. Its shares fell 20% intraday but closed down just 3%. Impac IMH also halted its payout. It'll stop most lending. Accredited Home Lenders lend said it may not be able to resume lending, imperiling its Lone Star buyout. E-Trade etfc late Mon. slashed views over mortgages. Countrywide cfc will double fin'l centers to attract more retail deposits.

Musharraf Offers To Quit As Gen.

8 Pakistan Pres. Pervez Musharraf vowed to resign as army leader and restore civilian rule if lawmakers re-elect him in a vote expected by mid-Oct. Musharraf, who seized power in a '99 coup, made a similar promise in '04, but reneged. The move appears aimed at placating growing public dissent, but opposition groups were unmoved.

PPI Dives On Aug. Energy Drop

9 The producer price index fell 1.4%, much farther than expected, as energy prices dived 6.6%, the most in over 4 years. But with oil prices rebounding to record highs, the relief may be short-lived. Core PPI, which excludes food and energy, rose 0.2%, a little above forecasts. Year over year, overall and core PPI rose 2.2%.

Blast Rocks Giant Iraq Refinery

10 A bomb burst a pipeline near Iraq's largest refinery, unleashing a huge spill into the Tigris River. Crude-tainted waters reached Tikrit, 60 miles south, forcing water plants to close. The spill could reach Baghdad in a day. Also, Iraq ordered a review of private security firms after U.S.-based Blackwater was accused of killing 11.