IBD's Top 10 - Tuesday

Fed Cuts Rate By 75 Basis Points

1 It was a big move in the fed funds rate, to 2.25%, but Wall St. expected 100 basis points. Policymakers said fin'l markets are still under "considerable stress" and downside risks to growth remain. But after backing up investment banks, they may be a bit less worried about credit woes. They also cited rising inflation expectations. Two members favored a smaller move.

Goldman, Lehman Beat Views

2 Q1 profits at Goldman Sachs GS and Lehman Bros LEH. fell more than 50%, but both beat views amid solid revenue. After Bear Stearns' BSC collapse, the investment bank giants relieved investors. Goldman made $3.23 a share, topping views by 65 cents, despite loan losses of over $2.5 bil. Goldman shares rose 16%, Lehman 46% and Morgan Stanley MS, which reports Wed., 18%.

Stocks Soar On Fed, Brokerages

3 The major averages started strong on Lehman's results and powered higher on the Fed's big rate cut. The Nasdaq rose 4.2%, the best in 5 years. The S&P 500 also climbed 4.2%. The Dow rose 3.5%. But trading volume dipped. Financials led the broad rally. The 10-year Treasury yield rose 17 ticks to 3.47%.

Obama Confronts Racial Tension

4 In a key speech addressing the uproar caused by incendiary sermons by his longtime pastor, Barack Obama harshly criticized his minister's words but strongly defended the man. He urged the nation to overcome the racism that he said fuels anger and resentment. "To condemn it without understanding its roots," he said, "only serves to widen the chasm."

Paulson: U.S. In 'Sharp Decline'

5 Treasury Sec'y Henry Paulson came the closest yet to conceding an election-year recession, but he said the actual "label" is less important than "what we do about it." Economic stimulus could boost growth in Q2 and Q3, he said. The Treasury and the Fed worked long weekend hours to engineer JPMorgan's Bear Stearns takeover. Paulson is a former CEO of Goldman Sachs.

Yahoo Issues Rosy 3-Yr Outlook

6 The struggling Internet icon backed its '08 profit forecast and predicted higher-than-expected revenue growth of 25% in '09 and '10. Analysts viewed the unscheduled, upbeat announcement as Yahoo YHOO making its case for a higher bid from Microsoft MSFT, as well as a sign that Yahoo's running out of options. Yahoo shares rose 7% to 27.66.

Visa Raises $17.86 Bil In Its IPO

7 The world's No. 1 credit card firm sold 406 mil shares at $44 a pop, beating a forecast range of $37-$42. It's the largest U.S. IPO ever, easily surpassing AT&T's $10.6 bil IPO in 2000. Visa and rival MasterCard MA, which has soared since its '06 IPO, aren't directly exposed to customer defaults and late payments, unlike American Express AXP and Discover DFS. Visa debuts on the NYSE Wed.

Dollar Gyrates Wildly Again

8 The dollar regained lost ground against the yen and Swiss franc, against which it had crashed for several days. It looked like a show of confidence that the Fed's rate cut would help the economy. But the pound and Canadian dollar, which had slumped badly, rebounded vs. the dollar, yen, Swiss franc and euro. Also on hopes of revived activity, crude swelled $3.74 to $109.42 a barrel.

Housing Starts Fell 0.6% In Feb.

9 The annualized pace of 1.065 mil homes was better than expected. But single-family starts fell for an 11th straight month, off 6.7% vs. Jan., and 40.5% vs. a year earlier, to their lowest level in 17 years. Building permits dived 7.8% to an annualized 978,000, suggesting that builders would continue to reduce activity.

Core Producer Prices Jump 0.5%

10 Feb.'s gain was the most in over a year and well above expectations. Year over year, wholesale costs rose 2.4% and look set to keep climbing. Overall producer prices rose 0.3% vs. Jan., as expected, as food prices retreated. Producer inflation eased to a still-lofty 6.4% from Jan.'s longtime high of 7.4%.