Stocks Rocky After Rate Cuts

Investors cheer/jeer/cheer the rate cut
By Kevin Spak,  Newser Staff
Posted Oct 8, 2008 9:25 AM CDT
Specialist Ronald York works on the floor of the New York Stock Exchange, Tuesday Oct. 7, 2008.    (AP Photo/Richard Drew)
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(Newser) – Stocks had a volatile morning, dropping as much as 230 points after the bell before swinging upwards once more, the Wall Street Journal reports. The Dow was up about 39 points at midmorning, while the Nasdaq and S&P gained 0.7% and 0.8% respectively, as investors digested a dramatic international central bank rate cut. “The market reaction was one of almost apathy at the beginning,” said one strategist. “Markets are still confused.”

Credit markets barely noticed the rate cut, with the benchmark derivative index narrowing just 8 basis points to 171. The dollar dropped against the Euro, but gained against the yen. “The market was waiting for a rate cut and the coordinated nature of policy easing may offer some solace,” said one securities company. “Keep in mind, however, that while lower rates help, it is fear and lack of trust that is ultimately hindering banks.”