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STOCKS: Wall Street closed lower Wednesday, sacrificing the advance it made after the Federal Reserve cut interest rates half a percentage point. Investors collected profits after nearly three sessions of big gains, unwilling to leave money on the table amid ongoing economic uncertainty. The Federal Reserve lowered the fed funds rate, or the interest banks pay one another for overnight loans, to 3 pct, the lowest level since spring 2005. It also lowered the discount rate, or the interest the Fed charges on loans to banks, by a half-point to 3.50 pct. FOREX: The dollar slid lower Wednesday after the Federal Reserve made an expected half-point cut in the federal funds rate and signalled that more moves lower could be forthcoming. BONDS: Treasurys reversed losses in after-hours trading Wednesday as the stock market gave back a big advance prompted by the Federal Reserve's widely expected interest rate cut.
Asian Stocks Rebound Fizzles Out
Forex: Carry trades continued at the start of the Asian session, as stock markets rebounded in a knee-jerk reaction to the Fed's emergency rate cut. But the rebound in Asian stocks lacked conviction, and carry trades reversed in the afternoon. "The very crux of the reason we didn't have a snapback (stocks) rally is that the market was calling for this already," said Peter McCorry at Keefe Bruyette & Woods, referring to the market's reaction to the Fed's 75bps interest rate cut. The NZD/JPY erased early gains despite talk of Uridashi issues later this week. The AUD failed to hold on to data-related gains after the stronger than expected Q4 inflation data, with AUD/JPY selling dragging down AUD/USD. AUD/USD is currently trading below the 60% retracement of its recent drop from 0.9021 to 0.8504.
Business news briefs
The average price of regular unleaded gasoline locally dropped this week, reflecting the nationwide decrease in prices. A gallon of regular unleaded at area pumps fell 7.8 cents to $3.079, AAA East Central reported. The average price of gasoline nationwide on Friday fell below $3 a gallon for the first time in a month, according to the AAA Fuel Gauge; yesterday the price was $2.978. .
The Broadcasters’ Big Payday
It's like money in the bank for broadcasters, as the first billion-dollar presidential campaign continues. While the world's oldest democracy, the United States, spends trillions of dollars claiming to bring democracy to Afghanistan and Iraq (through the barrel of a gun), what have we got here? A process driven by major donors shoveling huge sums of cash into the troughs of television broadcasters, who are holding the electoral process hostage through their control of the public airwaves. The same broadcasters arbitrarily exclude viable candidates from their so-called debates, elevating themselves to kingmaker. According to TNS Media Intelligence/CMAG, a group that tracks political advertising, overall spending by the presidential candidates in Iowa topped $50 million.
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