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From Briefing.com: 4:30 pm : What a difference a day makes.

On Monday the market was rattled by the news that Bear Stearns (BSC 5.91, +1.10) agreed to be acquired for $2 per share and the fear that other financial firms might face similar solvency issues that precipitated that fire sale.

On Tuesday those fears were cast aside following better than expected earnings reports from Goldman Sachs (GS 175.59, +24.57) and Lehman Bros. (LEH 46.49, +14.74) that produced reassurances from both firms regarding their liquidity position. The ensuing response led to a massive rally in the financial sector, which gained 8.5% on the day - its largest gain since March 2000 - and led all sectors in the broader market.

The broad-based nature of Tuesday's rally led to gains for all ten economic sectors, the lowest of which was a 1.8% jump in the defensive-oriented utilities sector. That is respectable in its own right, but it qualified as an underperformance in Tuesday's market where the S&P 500 advanced 4.2% - its biggest one-day percentage move since October 2002.

Aside from the aforementioned earnings reports, the FOMC decision served as the other major trading catalyst. The committee ultimately approved a 75 basis point cut in both the fed funds rate and the discount rate to 2.25% and 2.50%, respectively. It should be noted, however, that the vote on the fed funds rate carried dissents from Dallas Fed President Fisher and Philadelphia Fed President Plosser who were in favor of less aggressive action.

The major indices backpedalled some in the wake of the decision as many participants were expecting a cut of 100 basis points. The disappointment soon faded, though, and stocks were quick to regain their winning form.

Notably, the FOMC acknowledged that uncertainty about the inflation outlook has increased, yet it still holds the belief that inflation will moderate in coming quarters. In turn, it left the door open for more rate cuts, saying downside risks to growth remain and that it will act in a timely manner as needed to promote economic growth and price stability.

The bulk of today's gains, however, were achieved ahead of the FOMC decision. To wit, the Dow was up approximately 300 points just minutes ahead of the FOMC decision at 2:15 p.m. ET.

Joining the financial shares in a leadership position were the homebuilding stocks. They got a lift from a better than expected Housing Starts report for February and a measure of hope that conditions may be starting to ripen for improved housing demand with the Fed's actions and reports that the regulator for Fannie Mae (FNM 28.22, +6.01) and Freddie Mac (FRE 26.02, +5.40) may soon ease its excess capital requirement for the government sponsored enterprises in a bid to improve liquidity in the secondary mortgage market.

The Producer Price Index was the other economic release today. It carried mixed news with total PPI up 0.3% (consensus +0.4%) and core-PPI, which excludes food and energy, up 0.5% (consensus +0.2%). The market managed to look past the core-PPI number, however, since it followed a tamer reading on core inflation in the consumer price index.

Separately, the equity market rally sucked some life out of the Treasury market as the 10-year note fell more than a point, driving its yield up to 3.46%. The commodity-driven CRB Index jumped 1.9% while the dollar index increased 0.2% in response to the smaller than expected interest rate cut.DJ30 +420.41 NASDAQ +91.25 NQ100 +4.4% R2K +4.8% SP400 +4.0% SP500 +54.14 NASDAQ Dec/Adv/Vol 690/2296/2.40 bln NYSE Dec/Adv/Vol 341/2863/1.95 bln

4:10PM Adobe Systems beats by $0.03, beats on revs; guides Q2 EPS above consensus, revs in-line; reaffirms FY08 EPS guidance (ADBE) 31.88 +1.09 : Reports Q1 (Feb) earnings of $0.48 per share, excluding non-recurring items, $0.03 better than the First Call consensus of $0.45; revenues rose 37.1% year/year to $890.4 mln vs the $875.8 mln consensus. Co issues mixed guidance for Q2, sees EPS of $0.45-0.47 vs. $0.44 consensus; sees Q2 revs of $855-885 mln vs. $874.69 mln consensus. Co reaffirms guidance for FY08, sees EPS of $1.86-1.92 vs. $1.82 consensus. Co reaffirms FY08 rev growth of ~13%

9:01AM Tegal receives 6540 Plasma Etch System order from the Pennsylvania state university (TGAL) 4.75 : Co announces that it has received an order for a Tegal 6540 plasma etch tool from the Pennsylvania State University. The Tegal 6540 system will be installed in the Penn State Nanofabrication Laboratory, a National Science Foundation National Nanotechnology Infrastructure Network site, where the plasma etch tool will be used to perform research on complex oxide materials. Lead zirconate titanate, which is one of several complex oxide materials being studied at Penn State, is a piezoelectric material useful for fabricating MEMS devices such as wireless communication switches in next-generation cell phone handsets, and medical ultrasound transducers for diagnostic imaging.

6:06AM MIPS Technologies appoints Maury Austin as Chief Financial Officer (MIPS) 3.10 :

09:29 am Applied Materials: Caris & Company upgrades Average to Buy. Target $21 to $27. Caris upgrades AMAT to Buy from Average and raises their tgt $27 from $21. The firm expects the co to announce positive developments for their solar efforts over the next several quarters. They think the announcements will be focused on the growing opportunity in the thin film solar area and will be the primary catalyst for the stock.