The fed made a move today to help unclog the credit markets, and the stock market has shown some early gains, moving back over 10,000 to start the day:
Wall Street is moderately higher in early trading, with investors encouraged by a Federal Reserve plan to buy massive amounts of short-term debt from companies.
The plan unveiled Tuesday calls for the Fed to buy the short-term debt that companies use to finance their day-to-day operations. That would help create demand in the credit market and make it easier for companies to raise money.
Investors who are still clamoring for an interest rate cut were relieved by the government’s new measure to help the economy. The credit markets seized up after the failure of Lehman Brothers Holdings Inc. Banks have been reluctant to lend to most customers, including other banks, fearing they won’t be repaid.
The Dow Jones industrials rose 49 points to the 10,005 level.
We’ll see how long these early gains last.
UPDATE: Yikes, DOW down 258 points (9697)within 1 1/2 hours of markets closing. Will the downward spiral ever stop? Sounds like the markets were hoping for an interest rate drop like in Australia – which hasn’t happened yet.
UPDATE: Fed Chief Ben Bernanke left open the possibility of an interest rate cut today:
Federal Reserve Chairman Ben Bernanke warned Tuesday that the financial crisis has not only darkened the country’s current economic performance but also could prolong the pain.
The Fed chief’s more gloomy assessment appeared to open the door wider to an interest rate cut on or before Oct. 28-29, the central bank’s next meeting, to brace the wobbly economy.
Other stories from this morning:
- Fed to buy massive amounts of short-term debt
- Wall Street jumps back over 10,000