US STOCKS-Global rate cuts lift futures but off highs

...banks
                                
 * Doubts about impact of cuts temper optimism
                                
 * Credit market freeze persists
                                
 * Financials set to gain after sell-off
                                
(Updates with details, reaction, updates prices, adds
byline)
                                
 By Ellis Mnyandu
                                
 NEW U.S. stock index futures rose
in choppy trade, pointing to a higher Wall Street open on
Wednesday, after the Federal Reserve slashed interest rates in
concert with other global central banks to calm jittery markets.
                                
 Futures pointed higher after five straight days of major
declines by stocks. However, the futures were off their highs,
suggesting investors have doubts whether the actions would have
a lasting effect on recent unprecedented market turmoil.
                                
 The cut in rates came on the heels of an overnight stock
market plunge in Asia, where the Nikkei slid more than 9
percent, and declines in Europe, where fallout from the credit
crisis prompted Britain to pump $87 billion of emergency
capital to shore up its banks.
                                
 "This rate move is just about psychology," said Rick
Meckler, president of investment firm LibertyView Capital
Management in New York. "Like any of the crises before, you
need to see a major psychology shift. It's a slow process."
                                
 He expected trading to be cautious and volatile, saying the
market had long anticipated such action by the central banks.
                                
 Financial shares were likely to benefit, with the
electronic-traded fund that tracks the financial sector <XLF.A>
up 2.3 percent.
                                
 S&P 500 futures <SPc1> rose 23.20 points and were above
fair value, a formula that evaluates pricing by taking into
account interest rates, dividends and time to expiration on the
contract. Dow Jones industrial average futures <DJc1> climbed
139 points and Nasdaq 100 <NDc1> futures gained 31 points.
                                
 The interbank cost of borrowing overnight dollars jumped
again on Wednesday, indicating that credit markets remained
gridlocked, according to the latest daily fixing from the
British Bankers' Association, just before coordinated interest
rate cuts.
                                
 Besides the Fed, the European Central Bank, Bank of
England, Swiss, Canadian and Swedish central banks announced
rate reductions.
  (Editing by Kenneth Barry)







[YORK/Reuters/Finance.cz]