In a surprise move, the Federal Reserve lowered interest rates Wednesday, sending stock market indices and several RV company stocks soaring.
An interest rate cut was not anticipated until Jan. 30-31, when the next regularly scheduled Fed meeting will take place. However, the Fed lowered rates Wednesday because it has become concerned in recent days about the economy slipping into recession.
On Wednesday, the Fed lowered the “federal funds rate”, which banks pay on overnight loans between themselves, to 6%, from 6.5%. Most likely, this will result in major banks lowering their benchmark prime interest rates. The prime rate was at 9.5% during the second half of 2000; a period of time when the federal funds rate was at 6.5%.
The Fed’s action led investors to rush to buy stocks on the tech-heavy Nasdaq composite, which climbed 325 points, or 14.2% Wednesday, after falling to a 22-month low on Tuesday.
The Dow Jones Industrial Average also got caught in the updraft, gaining 300 points, or 2.8%, on Wednesday.
Several RV company stocks gained over 5% on Wednesday alone. The lists included Monaco, Fleetwood, Thor and Coachmen.
Monaco, which lost 1 3/16 on Tuesday, gained that all back, and then some, on Wednesday. Monaco stock climbed 1 3/4, or 11%, Wednesday to close at 18 1/4.
Meanwhile, Fleetwood gained 7/8, or 8%, on Wednesday, to close at 11 3/8, and Thor climbed 1 1/16, or 5%, to close at 21.
Coachmen also gained 1/2, or 5%, to close at 10 1/2, on Wednesday.
Here is a roundup of the other RV company stock activity on Wednesday:
Winnebago gained 5/16 to close at 17 3/8
National RV declined 1/4 to close at 11 1/2
Skyline gained 1 1/4 to close at 20 9/16
SMC declined 1/4 to close at 2 1/8
Holiday RV Superstores declined 1/8 to close at 4 1/8
Rexhall declined 1/16 to close at 5 15/16
Kit gained 1/16 to close at 3 1/8
Coast Distribution was unchanged at 5/8
Featherlite gained 1/32 to close at 1 17/32
Spartan Motors gained 3/16 to close at 2 1/4
Starcraft gained 15/32 to close at 2 3/8