Federal Reserve disappointed Wall Street today, Tuesday, 11 December, 2007 after interest rates were cut by just quarter of a percentage point. Investors thought that this reduction was already priced in the market and was too little. Half a percentage cut would have cheered them. Stocks just plunged once Feds decision hit the wires today at 2.15 pm E.T. Among other developments in the market, oil prices crawled up by more than $2/barrel and Citigroup named Vikram Pandit as its new CEO

Market was at its best highs just before Feds decision hit the wires. But stocks seemed to have unanimous response to Feds decision. Even the exciting technology stocks failed to excite investors. The Dow Jones industrial Average ended the day with a loss of 294 points at 13,432. The Nasdaq Composite Index, finished lower by 66 points at 2,652. S&P 500 finished lower by 38 points at 1,477.

Nine out of ten economic sectors posted losses today, led by the Financial sector. Twenty-eight out of thirty Dow stocks ended in red today. JP Morgan, Citigroup and American Express led the group of Dow laggards. AT&T and Mc Donalds were the only two Dow winners.

The central bank lowered the federal funds rate by a quarter-point to 4.25%. The Fed also lowered its discount rate, the interest it charges on direct loans it makes to banks, by a quarter-point to 4.75%. It was Feds third rate cut in the past three meetings

The Fed acknowledged an intensification of the housing correction, some softening in business and consumer spending, and strains in financial markets. It also said recent developments have increased the uncertainty surrounding the outlook for economic growth and inflation.

Citigroup sheds more than 4% after naming its new CEO

AT&T shares closed higher by 4% today after the company said that it will raise its dividend 12.7% and buy back 400 million shares.

Citigroup shares closed lower by more than 4% after the company named Indian born Vikram Pandit as its new CEO.

Barring MTNL, all Indian ADRs ended in red today. Wipro Technologies, Infosys and VSNL were the topmost losers, each shedding between 4%-5%. MTNL shares gained more than 2%.

Cut in interest rate by Federal Reserve took oil prices back above $90 today and crude closed more than $2 higher for the day. Lower borrowing costs are expected to spur fuel demand and investment in commodities. Crude-oil futures for light sweet crude for January delivery closed at $90.02/barrel (higher by $2.16/barrel or 2.5%) on the New York Mercantile Exchange. The contract touched $90.55 before the Fed announced its decision at 2:15 p.m. Prices are up 47% from a year ago.

On the New York Stock Exchange, nearly 1.6 billion shares traded hands, and declining stocks outran advancers more than 5 to 1. On the Nasdaq, more than 2.2 billion shares were exchanged, and decliners topped advancers nearly 4 to 1.

Tomorrow, investors will focus on investors will look for fresh economic data to help set the tone of trading. At 8:30 ET, the Labor Dept.'s report on November Export/Import Prices will hit the wires, along with the October Trade Balance. They will be followed by the Treasury Budget in the post lunch hours. .

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