Stocks Gain Over 100 Points, Fed's Lending Rate Steady

After one of the worst days ever on Wall Street, stock market rallied by the end of the day, with the Dow Jones industrial average gaining 141.51 points today. That increase was helped by the belief the Federal Reserve will rescue AIG and news that Barclays would buy the Lehman's broker business.

Stocks had a roller-coaster day amid disappointment that the Fed would not change the key lending rate. You can read the Fed's statement here--it includes the observations: "Strains in financial markets have increased significantly and labor markets have weakened further. Economic growth appears to have slowed recently, partly reflecting a softening of household spending. Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters."

Overall, many think the Fed made the right decision, because of, per the Timeswa, "the Fed’s limited ability to solve a problem that entails the entire housing and mortgage markets." The chief investment strategist of the Hartford, Quincy Krosby, told Bloomberg News, "This is a market that's not looking at fundamentals. IIt's going back and forth based on rumor and headlines and it has temporarily divorced itself from fundamental analysis.''

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

By Jen Chung in News on September 16, 2008 5:52 PM

Comments [rss]

EastRiver

^The Dow bottomed at like 7,200 after the tech bubble and stayed between 8,000 and 9,000 for a long time. Or are you suggesting it should have stayed there?

contro

Face Palm FTW!

MrCow

he's putting his fake eyeball back in it's socket

NannyState

You know that on a daily basis one of these walking Prilosec ads can be found swooning on the NYSE trading floor. And on tense days, there's always a photog there waiting for a "decisive moment".

Snoopy

You mean he "super glued" his hand to his forehead? Does he go into Starbucks like that?

Steven

The guy who is hitting his head in the picture made my day.

"This is a market that's not looking at fundamentals. It's going back and forth based on rumor and headlines and it has temporarily divorced itself from fundamental analysis."

No kidding Sherlock. It's all about speculation now and he has been this way for some time.

NannyState

Ask Uncle Sam. he just bought A.I.G.

Snoopy

But if I buy enough shares can I make a profit on the volume?

NannyState

Oops, the government might take out warrants for A.I.G. equity as part of a loan deal. The dollar shares might end up being worth a dollar.

JacqueMehoff

are these guys boy scouts? why the flag patch?

we be loyal.

NannyState

What's "going back and forth" are shares of that pennystock A.I.G.. Over one billion traded today. If they get a bailout package, the buyers are going to get very rich.

Snoopy

Why is it that all the photos of stockbrokers show them holding or hitting their heads? Can't they just take an aspirin before going to work?

Future Taliban

"This is a market that's not looking at fundamentals. It's going back and forth based on rumor and headlines and it has temporarily divorced itself from fundamental analysis."

Temporarily?. Lol. This market hasn't looked at fundamentals in YEARS.