11:30AM New York – Investors remain skeptical of the effectiveness of the Fed rate cut.

U.S. stocks opened lower and fell more after two hours of trading as investors worried that rate cut alone may not save economy from sliding into a recession. European markets fell after a tough talk on inflation from the European Central Bank. However, Asian markets rallied on the U.S. rate cut.

The U.S. economy has been leveraged on easy credit and low interest rates for the last seven years. The speculation in the housing market and rampant increase in construction spending was fueled by cheap credit and lax loan standards. Rate reduction, the blunt instrument, used by the Fed to stimulate economy is not going to help in unwinding the leverage in the economy.

Consumers and banks are leveraged and lower rates are not going to help in reducing this leverage in the financial system.

In fact, there are significant risks that the rate cut may add fuel to rising inflation in energy and food prices. Dollar could also come under pressure if rate fall any more.

Dow Jones Industrial Average fell 92 to 11,879.56, Nasdaq declined 40.89 to 2,251.34, and S&P 500 lost 15 to 1,295.50.

Apple Inc (AAPL: chart) fell 14% or $22.11 to $133.49 after it reported lower than expected earnings forecast for the current quarter and lowered revenue growth to 29% from 35%. Apple reported earnings in the first quarter, which included holiday sales, of $1.58 billion or $1.76 per share compared to $1.0 billion compared to $1.14 per share a year ago. Revenue in the quarter jumped $9.6 billion from $7.1 billion a year ago.

Apple shipped 2.32 million Macintosh computers, representing 44% unit growth and 47% revenue growth over the year-ago quarter. The Company sold 22.12 million iPods during the quarter, representing 5% unit growth and 17% revenue growth over the year-ago quarter. Quarterly iPhone sales were 2.31 million.

“Apple's revenue grew 35 percent year-over-year to $9.6 billion, an increase of almost $2.5 billion over the previous December quarter's record-breaking results,” said Peter Oppenheimer, Apple's CFO.

He added, “Our strong results produced cash flow from operations of over $2.7 billion during the quarter, yielding ending cash balance of over $18.4 billion. Looking ahead to the second quarter of fiscal 2008, we expect revenue of about $6.8 billion and earnings per diluted share of about $.94.”

Motorola (MOT: chart) reported sales of $9.65 billion in the fourth quarter of 2007. Net earnings in the quarter were $0.04 per share, which include $0.05 per share from continuing operations and a net loss of $0.01 per share from discontinued operations. Earnings from continuing operations include net charges of $0.09 per share related to a legal settlement, charges associated with previously announced workforce reductions and a write-down of assets, partially offset by tax benefits.

For the full year 2007, sales were $36.6 billion. The net loss was $0.02 per share, which included a net loss of $0.05 per share from continuing operations and earnings of $0.03 per share from discontinued operations. The net loss from continuing operations included net charges of $0.29 per share.

Motorola stock fell 19% or $2.28 to $10.04 after it reported earnings.

Commodities stocks including energy, base metals, minerals and mining companies declined in the session.

CVRD, also known as Vale, (RIO: chart) fell $2.55 to $24.28, BHP Billiton (BHP: chart) declined $2.03 to $55.77, and Rio Tinto (RIO: chart) dropped $8.72 to $322.59. Freeport-McMoran lost $10.41 to $71.10, Southern Copper Peru edged fell $5.81 to $75.

In Tokyo Nikkei 225 Index closed higher 256.01 or 2.04% to 12,829.06, in Hong Kong Hang Seng index increased 2332.54 or 10.72% closed to 24,090.17, in Australia ASX 200 index higher 225.50 or 4.35% to close 5,412.30.

In South Korea Kospi Index increased 19.40 or 1.21% to close at 1,628.42, in Thailand SET index closed lower 0.89 or 0.12% to 740.65, and Indonesia JSE Index edged increased 181.75 or 7.92% to 2,476.28. Sensex index in India increased 864.10 or 5.16% to 17,594.07.


10:00AM New York, 7:30PM Mumbai - Sensex posts a record gain in a single day, Reliance Energy shines.

Stock markets in India on Wednesday broke the seven-day losing streak with the Bombay Stock Exchange index posting a record one-day gain.