After the Federal Reserve cut the benchmark rate by 50 basis points, the financial sector and exchange traded funds (ETFs) rallied along with the rest of the market. The actions hint that the subprime "meltdown" might not be such a mess after all. Lehman Brothers (LEH) lowered its leveraged lending exposure and put its problems behind it, indicating that many other investment banks can do the same, reports Trang Ho for Investor’s Business Daily.
Today, Goldman Sachs (GS) surpassed Wall Street’s expectations with a third-quarter profit up 79%. Unfortunately, Bear Stearns (BSC) was not as fortunate as it posted a 62% drop in earnings, reports Joe Bel Bruno for the Associated Press. SPDR Financial Sector (XLF) currently is down 5.5% year-to-date.
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