Wall St gain on hopes of Fed rate cut; Dow up 176 pts

Wall Street gained on broad based buying. Financials showed significant strength, leading a late-day surge after odds increased that the Federal Reserve will cut rates in an effort to support a slowing economy. Goldman Sachs, JP Morgan Chase and Citigroup ended the day with handsome gains.

A bigger than expected drop in December new-home sales did not dampen the markets. New-home sales decreased 4.7% to an annual pace of 604,000, the lowest since February 1995 and capping the biggest annual decline on record. The homebuilding index also dropped as much as 4.4%. But homebuilding shares like Lennar and Centex rallied on the view that the Fed will come to rescue.

Earnings reports were mostly better than expected; Corning, Sysco and Halliburton topped expectations. Verizon's numbers were in-line. Mcdonald's earnings also beat estimates but the stock slumped on disappointing same-store sales.

US President George W Bush said that permanent tax relief is needed and asked to reform Fannie Mae, Freddie Mac and help homeowners refinance mortgages in his last state of the union address.

The Dow gained 176.72 points, or 1.45%, to 12,383.89. The Standard & Poor's 500 index shot up 23.36 points or 1.76%, to 1,353.97, while the Nasdaq composite index advanced 23.71 points, or 1.02%, to 2,349.91.

A look at how the Indian ADRs performed: