NEW YORK - While it will take time for the Federal Reserve's surprise rate cut to work its way through most parts of the economy, investors are likely to target stocks that will be obvious beneficiaries of lower rates. Take, for example, companies in the timber and forest products industry.
"I think investors are going to shift their focus from weak profits today to ten or 12 months from now, when lower interest rates start to stimulate the housing market," says Peter Ruschmeier, analyst at Lehman Brothers. Ruschmeier likes stocks such as Tacoma, Wash.-based Weyerhaeuser (nyse: WY - news - people), which are particularly well positioned to benefit from a lower interest rate environment. "Right now, earnings are very depressed in the wood-products business," he says, "that's why share prices of companies like Weyerhaeuser have sold off pretty heavily over the last 12 months."
Full story at Forbes.com