The U.S. markets soar in response to new earnings reports and in
anticipation of a Federal Reserve rate cut.  Meantime, the U.S. Treasury
Secretary says the U.S. is in a "down-cline". 

NEW YORK, NEW YORK, UNITED STATES (MARCH 18, 2008) (NYSE) - Stocks jumped on Tuesday (March 18) as stronger-than-expected
earnings from Goldman Sachs Group Inc's and Lehman Brothers Holdings Inc
provided some reassurance about the ailing financial sector. All three major
indexes were up close to 2 percent.
    Investors also looked forward to what is expected to be a steep
interest rate cut from the Federal Reserve's policy-setting committee around
14:15 (EST).  Fed policy-makers are expected to slash interest rates by a
whopping 1 percent to try to give the flagging U.S. economy a lift.
    Hugh Johnson, the chief investment officer at Johnson Illington
Advisors says it will take more than one good day to calm investor anxiety.
He says, "One day doesn't really make a market. We are going to need many
more days or even weeks before confidence in the financial markets, the stock
market in particular is restored. But I would say if you are talking about my
suspicions, my suspicion is we very well have passed the worst moment and the
reason I say that is because pessimism is fairly widespread, it's very, very
widespread, and arguably the stock market is undervalued, and you rarely get
that combination of being undervalued with widespread pessimism, and when you
do see it, it historically presented a buying opportunity to
investors."
    Investors are also absorbing the latest comments by U.S. Treasury
Secretary Henry Paulson.  On Tuesday (March 18), Paulson described the economy
as being in "sharp decline," the closest he has come yet to
conceding an election-year recession has set in.
    Appearing tired after a weekend of helping to broker a fire sale
takeover of Wall Street investment bank Bear Stearns to keep it from outright
collapse, Paulson pushed back against efforts to have him admit a recession
was under way.  He said, "What's important is we know we're in a shard
"down-cline"  and there's no doubt the American people know the
economy has turned down sharply. So to me much less important is the label
that's placed on it today, much more important is what we do about
it."
    Treasury officials, in cooperation with the Federal Reserve, worked
nonstop last weekend to help engineer the $2-a-share takeover of Bear Stearns
by JPMorgan as they sought to restore some stability to shell-shocked
financial markets.