WORLD> America
|
WORLD> America
|
|
Stocks mostly fall after Fed cuts interest rate
(Agencies)
Updated: 2008-10-30 07:45 But the final hour of trading on Wall Street over the past month has seen turnarounds in sentiment as well as prices, and the late-session volatility that has become the norm was in force again Wednesday. "We set ourselves up in the last hour with a golden opportunity to lock in profits," said Ryan Larson, senior equity trader at Voyageur Asset Management, a subsidiary of RBC Dain Rauscher. He said that very late in the day, more investors were putting a somewhat downbeat spin on the Fed's statement, which Larson said indicated policymakers are willing to lower the fed funds rate below 1 percent if necessary. Traders started thinking, "if they're willing to go under 1 percent, there must be serious problems that we don't know about yet," he said. The Dow was up as much as 298 points in the last quarter hour of the session, giving it a two-day gain of more than 1,187 points, when it began to slide. It closed down 74.16, or 0.82 percent, at 8,990.96. During the 21 trading days so far this month, the Dow has logged gains or losses of fewer than 100 points only twice — on Oct. 1 and Oct. 14; the month has seen unprecedented volatility, with the blue chips recording their largest ever advance, 936 points, and their largest ever decline, 778 points. Broader stock indicators were mixed. The S&P 500 index fell 10.42, or 1.11 percent, to 930.09, and the technology-heavy Nasdaq composite index advanced 7.74, or 0.47 percent, to 1,657.21. Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume totaled 7.01 billion shares compared with 6.93 billion shares traded Tuesday. Some traders expressed frustration at the market's finish. "You cannot have moves like this and have any sort of investor confidence," said Joe Saluzzi, co-head of equity trading at Themis Trading LLC. The credit markets had a lukewarm response to the Fed move. The yield on the three-month Treasury bill, regarded as the safest investment around and an indicator of investor sentiment, fell to 0.58 percent from 0.74 percent Tuesday. A drop in yield indicates an increase in demand. Meanwhile, the yield on the benchmark 10-year Treasury note rose to 3.86 percent from 3.84 percent late Tuesday. Light, sweet crude rose $4.77 to settle at $67.50 a barrel on the New York Mercantile Exchange as the dollar fell against other major currencies. With many commodities priced in dollars a weaker greenback makes prices rise. It was clear from Wednesday's trading that Wall Street is nowhere near moving away from the volatility that has devastated stock prices this month. And many investors are hesitant to re-enter the market after being hit hard — even with Tuesday's jump, the three major stock indexes are still down more than 30 percent for the year, battered since last month's freeze-up of the credit markets. The troubles with the credit markets have made it harder and more expensive for businesses and consumers to get loans. While signs have emerged that the government action to revive credit markets is starting to work, investors remain skittish over the effects of the prolonged credit freeze on the economy, which relies on lending to feed growth. Investors are hoping the latest rate cut will complement the government's still-unfolding efforts to aid the commercial paper market, where companies turn for short-term loans, and the banks themselves. The Treasury Department this week is investing directly in banks, hoping the cash will make them more likely to issue loans. Wall Street's rally Tuesday helped lift trading in most markets overseas. Japan's Nikkei stock average jumped 7.74 percent. Britain's FTSE 100 rose 8.05 percent, Germany's DAX index slipped 0.31 percent, and France's CAC-40 rose 9.23 percent. |
