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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
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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.”

Specialist Ronald York works on the floor of the New York Stock Exchange, Tuesday Oct. 7, 2008.
Specialist Ronald York works on the floor of the New York Stock Exchange, Tuesday Oct. 7, 2008.   (AP Photo/Richard Drew)
Federal Reserve Chairman Ben Bernanke, speaks to the National Association for Business Economics, Tuesday, Oct. 7, 2008, in Washington.
Federal Reserve Chairman Ben Bernanke, speaks to the National Association for Business Economics, Tuesday, Oct. 7, 2008, in Washington.   (AP Photo/Manuel Balce Ceneta)
A trader holds his head after the closing bell of the New York Stock Exchange, Tuesday, Oct. 7, 2008.
A trader holds his head after the closing bell of the New York Stock Exchange, Tuesday, Oct. 7, 2008.   (AP Photo/Richard Drew)
Trader Bradley Silverman works on the floor at the New York Stock Exchange, Tuesday Oct. 7, 2008.
Trader Bradley Silverman works on the floor at the New York Stock Exchange, Tuesday Oct. 7, 2008.   (AP Photo/Richard Drew)
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