US stocks stabilise after Fed cut

[questionmark]

US stocks stabilise after Fed cut

By James Quinn, Wall Street Correspondent

Last Updated: 6:39pm GMT 22/01/2008

US stock markets stabilised and the FTSE 100 closed almost 3pc higher as investors digested the the Federal Reserve's emergency cut in interest rates.

The dramatic decision by Fed Chairman Ben Bernanke to slash rates 0.75 percentage points to 3.5pc was announced an hour before US markets were due to open. The move, the first emergency cut since the aftermath of 9/11 and the biggest since 1984, failed to alter the direction of markets that were already pointing south.

After plunging more than 400 points at the open, the Dow Jones Industrial Average had recovered to trade down just 129 points by early afternoon The FTSE 100, which yesterday suffered its worst fall since the 9/11 attacks, ended the day 2.8pc higher.

The Dow now stands 17pc lower than its October high, and is perilously close to being 20pc off that high, the traditional indicator of a bear market. The broader S&P 500 index was down just 15 points at 1,309, while the technology-skewed Nasdaq was down 40 at 2,229.

But the move from the Fed did little to assuage investors' underlying concerns about the outlook for the economy.

Ted Scott, a fund manager at F&C in London, said: "The move also smacks of panic.

"The cut suggests that the economy is already in dire straits and paradoxically confirms the markets worst fears."

Highlighting the volatility in the market, the CBOE Volatility Index - known as the Vix - hit a new fresh high of 37.57, overtaking the last high of 37.50 which was hit on August 17 last year as the US sub-prime mortgage crisis began to turn into a global credit crisis.

Full story, Source:The Telegraph

[Magnatude]

It will help, however its a temporary fix. Its no longer a case of IF it crashes, only WHEN.

It can be changed to an "IF" only if consumers stop using credit and the US stops spending so much on military expenses or cut the pork.

However that is a whole lot to ask and unlikely any of the 3 will be implemented.

[Unlimited]

what happened was they suckered the indivual investor on the open then bought it back....smoke and mirrors..

[Lt_Ripley]

how many cuts does this make now ?

[Atheist God]

This next economic depression will see the US change into a land where personal land ownership among other luxuries no longer exist. It will make people so desperate for a solution they will except anything as long as they can put food in their stomachs.

[Dowdy]

This is a very, very short term fix and chances are it'll probably make it worst in the long run

[SnakeProphet]

This next economic depression will see the US change into a land where personal land ownership among other luxuries no longer exist. It will make people so desperate for a solution they will except anything as long as they can put food in their stomachs.

Now, that is a huge hyperbole. Poverty is not the end of the world.