Stocks Drop, Market Awaits Fed Cuts

Dow sinks below 13,000 as credit tremors continue
By Jonas Oransky,  Newser Staff
Posted Aug 15, 2007 4:18 PM CDT
Traders gather at a post on the floor of the New York Stock Exchange Wednesday Aug. 15, 2007. Stocks wobbled Wednesday after briefly dipping below 13,000 as Wall Street kept a close eye on the Federal...   (Associated Press)
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(Newser) – Major indexes sank again after a volatile day, as analysts continue to speculate on a possible interest-rate cut. The New York Fed put about $7 billion into the system with an overnight repurchase agreement, which put an early bounce in the Dow before it lost 167.45 later in the day to close below its historic 13,000-point benchmark at 12861.47, mainly on credit jitters that bled into Asian markets overnight.

The Nasdaq lost 40.29 to 2458.83 and the S&P fell 19.84 to 1406.70. Some traders are holding out hope that the Fed will agree to ease rates when it meets in September, while others worried that an unsuccessful rate cut could lead to a spike in inflation that would spell a far deeper crisis.