Over that last six months, the Dow is up 3%. But, it has been a "no stock market growth" kind of period. GDP was fairly strong, but any strength in tech shares and consumer goods stocks was taken down by financial companies like Citigroup (C) and Washington Mutual (WM).

The Dow peaked on October 9 at above 14,198, and is now at 13,727. In October, the Dow was actually up 14% for the year. Then, that fell apart.

The Fed will cut a quarter of a point later today, and may cut again in January. No matter what economists say, business and consumers like lower interest rates. It will help with credit card debt, mortgage resets, and the rates that businesses can get to fund a little expansion, or pay off current obligations. Some analysts say that a rate cut is too late. A rate cut may be tardy, but, by definition, saving money can’t come too late.

The rate cut comes at a time when some of the write-off working their way through big financial institutions may be peaking, Given them a better rate to loan troubled SIVs and money market funds capital to improve liquidity will help make the crisis pass. It won’t fix it overnight, but it could allow shares in financial institutions to recover. When a stock is down 50%, it does not take much good news to help it bounce up a bit.

If the consumer sees he can pay a bit less on his "about to reset" mortgage and buy a car for a little less per month, he is going to feel better. He may not be out of the woods, but at least the undergrowth is not as thick.

For the Dow to hit 15,000 from here, it needs a 9% move. That is less than the move that it made from January to October. It is certainly possible that the big financial company shares will recover 15% over the next two months, especially if they get some relief on the cost of borrowing. Auto companies, trading at 52-week lows, should also recover.

A small bounce in capital spending, helped by a little easing in credit, will help companies like Cisco (CSCO) and GE (GE). Troubled companies with big debt loads like AMD (AMD) and Level 3 (LVLT) should also get some earnings help if rates drops.Good for their stocks.

The Dow at 15,000. It was getting close a few weeks ago. The rally will be on today. By the end of January the market will have recovered what it has lost plus 5%. Not such a big ambition.

Douglas A. McIntyre

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