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 hit an intraday high as the CBOE panic meter headed for 60, double what would normally indicate high volatility--and perhaps hinting the market was trying to form a bottom.
"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."