Even a last minute interest rate cut from the Fed couldn’t stop the inevitable:
NEW YORK (CNNMoney.com) — U.S. stocks plunged at the start of trading Tuesday, with investors ignoring the Federal Reserve’s emergency rate cut to join the global selloff on recession fears.
The Dow Jones industrial average lost more than 400 points. The Nasdaq composite index fell 5 percent. The Standard & Poor’s 500 index lost 3.5 percent.
The Fed cut rates by three-quarters of a percentage point to 3.5 percent, citing the weakening economic outlook. The move came ahead of the central bank’s regularly scheduled meting.
As a recession looms, President Bush and lawmakers from both parties are due to meet Tuesday to discuss a package to juice the faltering economy. Last week, Bush unveiled a stimulus plan worth up to $150 billion.
Treasury Secretary Henry Paulson said Tuesday that Congress and the White House need to act quickly on a package of tax cuts and other measures to boost the economy.
Among stocks to watch, financial stocks are likely to take another hit after Bank of America (BAC, Fortune 500) and Wachovia (WB, Fortune 500) both posted dismal results due to the mortgage and credit mess.
This isn’t over yet folks.
January 22nd, 2008 at 12:32 pm
That “stimulus plan” is a terrible idea. It also infuriates me that the Fed continues to drop rates; our dollar has already lost 1/3 of its “value” and the Fed will only succeed in making matters worse (stagflation, anyone?). I have been trying to tell people that gold is where it’s at for awhile now, and I won’t doubt if it climbs back over 900 soon.
January 22nd, 2008 at 4:59 pm
David is right. I watched all morning for the dollar to gain against the euro and it went the other way!! The dollar tanked by over 100 pips today, losing all of the ground it had gained in the last few weeks.
Doug’s right too. Like he says, “This isn’t over yet folks.”
Markets all over the world are tanking.