Rate-Cut Rally Fades Away

Stocks soar, then drop on Fed action
By Jonas Oransky,  Newser Staff
Posted Jan 30, 2008 3:40 PM CST
NYSE Euronext Chairman Jan-Michel Hessels and Euronext CEO John-Francois Theodore, visit the floor of the New York Stock Exchange, Wednesday Jan. 30, 2008. Wall Street retreated Wednesday ahead of a widely...   (Associated Press)
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(Newser) – The Fed’s half-point rate cut this afternoon briefly sent stocks soaring—before the rally crumbled and the Dow ended down 37.47 points at 12,442.83. Most Streeters have welcomed the series of interest rate slashes, but some are concerned they are too aggressive and could trigger inflation and other trouble. “The moves, instead of stabilizing the system, could lead to more volatility,” one economist told the Wall Street Journal reports.

The Nasdaq slipped 9.06 points to 2,349, while the S&P lost 6.49 to close at 1,355.81. The day’s other news was mixed, with fourth-quarter GDP coming in at 0.6%, well below the estimated 1.2%—while the private sector saw a surprisingly big boost of 130,000 jobs this month. Yahoo posted a loss of 23% in the fourth quarter, and UBS revealed $14 billion in write-downs.