"The global demand for technology will be fairly robust in the next 18 months," Openshaw predicted. "I think tech stocks will continue to do well and bring the stock prices up with it." Standard & Poors agreed with Openshaw, issuing a strong buy opinion on Microsoft, eBay, AT&T, EMC and eBay. S&P issued a hold opinion on Yahoo, which is rumored to be considering layoffs.Just minutes after the market opened, the Federal Reserve Board voted to lower its target for the federal funds rate 75 basis points to 3.5 percent. The Board also approved a 75-basis-point decrease in the discount rate to 4 percent. It was the first rate cut between regularly scheduled Federal Reserve Board meetings since Sept. 17, 2001, the first day the markets reopened after the Sept. 11 terrorist attacks. According to a statement by the Federal Reserve Board, the emergency rate cut came in "view of a weakening of the economic outlook and increasing downside risks to growth. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets." In a Jan. 22 morning speech to the U.S. Chamber of Commerce, Treasury Secretary Henry Paulson said, "I continue to have confidence in the underlying strength of the global economy." Nevertheless, Paulson added, "The U.S. economy is experiencing a significant housing correction. This was inevitable after years of unsustainable home price appreciation, and it is exacting a penalty to our economic growth. That, coupled with high energy prices and capital market turmoil, has caused our economy to slow materially in recent weeks."
"As it reports what we expect will be strong fourth-quarter EPS [earnings per share] this week, we anticipate AT&T will give greater commentary on the trends it expects to see in 2008," S&P predicted. "We expect that wireless and DSL growth will be drivers for revenue, offsetting impact of cable competition, and see incremental cost savings from merger synergies helping operating margin expansion."