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Stocks closed lower after swinging wildly all day as a coordinated global rate cut failed to reassure investors.
The Dow Jones Industrial Average jumped between triple-digit gains and equal-sized losses before ending down 200 points as the markets continued to worry about the growing credit crisis.
The Vix [VIXÂ
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"The action we're seeing is very typical of what happens when you capitulate, when you're working your way through a bottom," Art Hogan, managing director at Jefferies, said on CNBC. "That doesn't mean we need to recover very quickly."
Uncertainty pervaded the trading day, begun early when when the rate-cut news broke.
The Federal Reserve, joined by others around the world, again tried throwing the credit community a life raft, when it slashed its primary lending rate by half a percentage point to 1.50 percent. The European Central Bank cut by the same amount to 3.75 percent.
But the impact of the moves was modest as various benchmarks showed continued tightening in bank monetary policy.
The Ted Spread, which measures the gap between the London Interbank Offer Rate, or Libor, and the 3-month Treasury bill widened past 4.0 percentage points. Overnight Libor pushed past 5.3 percent, while 3-month Libor hit 4.52 percent.
"I think the consensus here is this won't work," Jim Paulson, of Wells Capital Management, said on CNBC. "It just gives you a sense that they keep running out of bullets."
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Kathy Willens / AP |
"If we have to use a bullet a day just to keep from going down--I think we've got to get to next week and we've got to get that $700 billion (government rescue) package, start buying something, and that has the essence of maybe turning this around."
Pockets of strength pushed pivotal bank stocks through a wild elevator ride.
Bank of America [BACÂ
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Apart from the rate cut, Morgan Stanley [MSÂ
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But MetLife [METÂ
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JPMorgan Chase [JPMÂ
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The intense flurry of activity led to hopes for a market bottom.
"Big disappointment this morning, because we could have an even better opportunity to buy if they had flushed them out down 500 or 600 points," Art Cashin, director of floor operations at UBS, said on CNBC.
  Investor Toolkit |
Computer companies helped push the Nasdaq higher, with Apple [AAPLÂ
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Outside the US, the UK government announced a rescue package for banks under which at least 200 billion pounds ($350 billion) will be made available to financial institutions, plagued by bad debts and a crisis of confidence.
Britain said it would inject up to 50 billion pounds ($87.2 billion) of government money into the country's banks as part of a multibillion pound package to shore up the financial system.
Signs of Economic Woes
News from outside the banking sector did not contribute to lifting the investors' spirit.
Discount retailer Costco [COSTÂ
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Aluminum producer Alcoa [AAÂ
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Toyota Motor will likely post a 40 percent slide in annual profit, missing its profit estimates on weak sales in North America and slower growth in China, the Nikkei business daily reported.
Volvo, owned by Ford Motor [FÂ
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In retail, JCPenney [JCP Loading...   () Â








