Stocks Tumble As Rate Cuts Fail to Ease Economic Fears
Wall Street brushed off the Federal Reserve's latest attempt to stem the financial crisis yesterday, taking wild swings before stocks plunged deep into the red.</br></br>Investors have endured six straight days of losses and were caught between cheering a cut in a key interest rate yesterday and fearing that it is already too late to avoid a global recession.</br></br>The Dow Jones industrial average fell 2 percent, or 189.01 points, to 9,258.10. The technology-heavy Nasdaq composite index and broader Standard & Poor's 500-stock index had smaller losses. The Nasdaq was down .83 percent, or 14.55 points, to close at 1,740.33. The S&P fell 1.13 percent, or 11.29 points, to 984.94.</br></br>The markets fell in early trading after the Federal Reserve said it would cut the target federal funds rate to 1.5 percent from 2 percent and was matched by rate cuts in Canada, Britain, Sweden, Switzerland and by the European Central Bank. Stock prices fluctuated throughout most of the day, with the Dow surging as much as 2 percent. But the market turned negative in late trading after Treasury Secretary Henry M. Paulson Jr. reduced investors' expectations that a further federal intervention into the financial markets was imminent.</br></br>"I have never seen this type of volatility. It reflects very high levels of uncertainty," said Sean Ryan, a banking analyst at the Sterne Agee brokerage firm in New York. "People who look at financials all day and understand the fundamentals very well still can't make heads or tails of what's going on."