Big Rally Ends in Modest Gains

Oil drop, Fed's confidence in growth not enough to preserve rise
By Nick McMaster,  Newser Staff
Posted Jun 25, 2008 3:36 PM CDT
Federal Reserve Chairman Ben Bernanke, center, listens during a meeting of the China Strategic Economic Dialogue, Tuesday, June 17, 2008, at the U.S. Naval Academy in Annapolis, Md.    (AP Photo/Susan Walsh)
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(Newser) – The markets rallied for much of the day on news of ebbing oil prices and the Fed's decision to hold rates steady, but it fell mostly flat by the finish on nagging worries about long-term growth, the Wall Street Journal reports. The Dow—at one point up more than 100 points—added 4.40 points to 11,811.83. The Nasdaq climbed 32.98 points to 2,401.26, while the S&P 500 rose 7.68 points to 1,321.97.

Oil prices fell more than $2 to $134.58 a barrel on news that US oil inventories were swelling. The Fed stirred investor confidence in minimizing concerns on the “downside risks to growth,” but not enough to hold through the bell. The market would have “needed a statement downplaying inflation risk to create a massive turnaround,” said a Cantor Fitzgerald strategist.