"And we also sold our interest-sensitive stocks right away," he added.

It was not a good day for interest-sensitive financial stocks.

"Most major rallies begin with leadership from interest-sensitive stocks, and utilities are the strongest."

Banking and other interest-sensitive stocks looked particularly good yesterday after the Fed cut the discount rate.

In the quarter, a number of former highfliers were hurt by poor earnings results, and interest-sensitive stocks suffered.

Cyclical and interest-sensitive stocks continued to lead the market, although their gains yesterday were far less uniform or dramatic than the day before.

Utilities have long been known as interest-sensitive stocks as well.

With some exceptions, utilities, banks, insurers and other interest-sensitive stocks also rose.

As evidence, he pointed to the exceptionally strong performance of interest-sensitive stocks like banks and home builders.

Even though interest rates have been falling, profit taking was so heavy that banks, insurers and other interest-sensitive stocks were particularly hard hit.