Mortgage Stocks Buoyed by Rate Cut

The Federal Reserve Board's decision to cut the target federal funds rate by 50 basis points (see item below) proved good medicine for many ailing mortgage-related stocks Tuesday.Mortgage insurers saw the biggest gains, with Radian's share price climbing by $2.34, or 11.3%, to close at $22.98. PMI was up $2.95, or 10.0%, to close at $32.57. MGIC rose by $2.70, or 8.8%, to close at $33.50. And Triad Guaranty rose $1.28, or 7.8%, to close at $17.67. Lenders and secondary-market agencies also benefited, with Countrywide's shares rising by 3.2% and Washington Mutual's shares rising by 4.95% on the day. Fannie Mae was up 3.3% and Freddie Mac's share price rose by 5.25%. The broader market also posted its biggest one-day gain in more than four years on Tuesday, as the Dow Jones industrial average rose by 336 points, or 2.51%.