daily mkt review Dec 11 2007

--Federal Reserve cut interest rates (to 4.25%) for the third time since August, and left the door open to further cuts. --Fed cut Fed Fund rate (overnight lending rate) by 25 bps. It also lowered discout rate by 25 bps to 4.75%. --But the cut, at the low end of WS hopes, disppointed investors. S&P sank 2.5%. --Some technical factor is in play too. Investors, who bet on the rate cut, pulled money out of the market right after the news were released. --Insteasd of signaling the balance between economic growth and inflation like in the last annoucemtn, Fed says it will continue to assess the effects of financial and other developments on economic prospects and will act as needed.