Stocks Fall Sharply on Fed's Gloomy Outlook
Stocks fell sharply after the Federal Reserve cut interest rates, as investors focused on a Fed statement suggesting that the economy will continue to be weak.</br></br>After trading higher for most of the day, market indexes began falling almost immediately after the Fed announcement. The Nasdaq Composite Index tumbled 2.66%, or 50.05 points, to 1831.30, its lowest level since March 29. The Dow Jones Industrial Average fell 1.41%, or 145.93 points, to 10174.14, its worst level since April 16. The Standard & Poor's 500-stock index dropped 1.21%, or 14.15 points, to 1157.26.</br></br>Bonds rose and the dollar fell.</br></br>The stock-market drops, which came even though the Fed's move was in line with Wall Street expectations, reflect a frustration among investors that the current economic slump may be nowhere near a turnaround.</br></br>"It was the most bearish commentary the market could have received, the worst-case scenario," said Bill Schneider, head of stock trading at UBS Warburg. "The market has been grasping at straws for evidence of a recovery," but the Fed was "blunt and pessimistic."