Stocks Plummet on Rate Worries

Fed minutes fail to confirm future rate cuts
By Caroline Zimmerman,  Newser User
Posted Aug 28, 2007 4:05 PM CDT
Traders and Specialists work the trading floor of the New York Stock Exchange, early Friday, Aug. 17, 2007. Stocks soared Friday, propelling the Dow Jones industrials up more than 180 points, after the...   (Associated Press)
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(Newser) – US stocks tumbled for the second day in a row after Fed minutes drained widespread hope of a rate cut next month, exacerbating slumps in consumer confidence and home values. The Dow dropped 185 to close at 13,135.5, the S&P was off 24.6 at 1,442.17, and the Nasdaq fell 43.1 to 2,518.20.

Volume was also down again: The NYSE moved just 962 million shares with losers outrunning winners 5 to 1. Hope springs eternal that an inflation-minded Fed will buck its trend and slash rates in September, but trading based on this assumption is "a dangerous game especially if the Fed doesn't follow our script," one market strategist said.