Rally Masks Real Fears --- Investors Express Little Confidence in Policy Makers to Tackle Real Problems
A day after a scary plunge, financial markets got a boost Tuesday from the Federal Reserve's pledge to keep interest rates low.</br></br>But the much-needed rally, coming in another wild, skittish session that sent the Dow Jones Industrial Average seesawing, did little to erase investors' underlying fear: Can policy makers manage the significant headwinds buffeting European and American economies?</br></br>A promise by the Fed to keep rates "exceptionally low" until 2013 and some new, but vague, language about the "tools" at the central bank's disposal to stimulate the economy was enough to spark a 430-point gain in the Dow Jones Industrial Average -- a partial recovery after the benchmark index had dropped more than 1,000 points in the previous three trading days.</br></br>The spark also ignited a rally in Asia, where shares rose broadly midday Wednesday but were off their morning highs.</br></br>While the Fed's move may have stanched the bleeding in the stock markets and soothed frayed nerves, investors questioned its impact on the real economy, with interest rates already having been at rock bottom for nearly three years.