LONDON (ShareCast) - Though the surprise cut in US interest rates failed to push Wall Street higher it did appear to limit the damage in comparison with the sort of losses seen on other markets yesterday.

Stocks opened sharply lower with the Dow-Jones 30 down more than 450 points at one stage before the interest rate cut began to have a stabilising effect and prices recovered.

At the close the Dow-Jones was down 128 at 11,971 while the broader-based S&P 500 fell 14 points to 1,310. Tech stocks were especially weak and dragged the tech-heavy NASDAQ Composite 47 points lower to 2.292.

The Federal Reserve cut its benchmark interest rate by three quarters of a point to 3.5% in an effort to stave off a recession and following a slump in global stock markets. The US central bank was not scheduled to make its next interest rate decision until next week.

Laboratory instruments maker Waters was the major casualty among blue-chips. Its fourth quarter earnings per share (EPS) rose to 96 cents compared with 78 cents in the fourth quarter of 2006, but this figure disappointed analysts who were looking for EPS of around $1.06.

Consumer electronics company Apple retreated in heavy trading ahead of results announced after the market closed. Apple’s first quarter results came in ahead of analysts’ expectations. Net income in the first quarter rose to $1.58bn from $1bn in the first quarter of the preceding year, on sales of $9.61bn. This equated to earnings per share (EPS) of $1.76, compared with $1.14 a year earlier; analysts had been expecting EPS of $1.61.on sales of $9.43bn.

However, profit in the company’s second quarter will be 94 cents a share on sales of $6.8 billion, Apple said. Analysts had generally been expecting earnings per share in excess of $1 for the second quarter.

Chipmaker Texas Instruments was another to report after the market shut. The mobile phone chipmaker said fourth quarter net income rose to $756m from $668m a year earlier. Fellow chipmaker Motorola traded nervously lower ahead of results tomorrow.

Chemicals company DuPont eased slightly after announcing a 37% slide in fourth quarter profits. Fourth quarter profits fell to $545m from $871m a year earlier when the company benefited from a $449m tax benefit. Profit excluding one-time items rose to 57 cents a share from 45 cents a year earlier.

Oil giants Exxon and Chevron were friendless as the price of oil slid to a six-week low.

Retailer Sears announced restructuring plans that were well received by the market. The retailer is reorganising and decentralising its structure.

Bond insurer Ambac, which last week saw its insurance rating downgraded by Fitch Ratings to AA from AAA, shot up today despite reporting worse than expected fourth quarter losses. Ambac’s net loss in the fourth quarter of $3.26bn represented a net loss of $31.85 per share, and compares with a positive net income of $207.7m ($1.88 per share) in the fourth quarter of 2006.

The company confirmed it is exploring strategic alternatives with a number of potential partners, raising hopes that the company may be taken over. Fellow guarantee company MBIA rose in sympathy.

Bank of America reported fourth quarter earnings well below analysts’ estimates, as trading losses on collateralised debt obligations (CDOs) took their toll.

The Charlotte-based bank said fourth quarter net income slumped to $268m, compared with $5.26bn in the fourth quarter of the preceding year. Earnings per share came in at $0.05, compared with market expectations of $0.08.

Fellow Charlotte-based bank Wachovia also disappointed the market. It reported fourth-quarter net income of $51 million, representing 3 cents a share, compared with $2.3bn ($1.20 a share) a year earlier. Excluding merger costs, Wachovia earned 8 cents a share. Analysts had been expecting earnings of 33 cents a share.

Wachovia, the fourth largest bank in the US, took a $1.7bn hit in net valuation losses and made provisions of $1.5bn for credit losses of $1.5 billion.

However, the force was with financial institutions today in the wake of the Fed’s rate cut and despite the disappointing earnings both stocks made headway.

KeyCorp, Ohio's third largest bank, was also wanted after posting fourth quarter net earnings per share of 6 cents when analysts had pencilled in a loss of 5 cents per share.

Health care products maker Johnson & Johnson reported record fourth quarter sales, with domestic revenues up 9.1% and international sales 25.8% higher.

• News Channel