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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.
January's Plunge Has Been Dizzying; Now, the Good News
Forget the "January effect," the traditional boost stocks got from new money flowing into the market after the new year. The few weeks of trading in 2008 have turned out to be among the worst ever for the stock market. And Monday's plummet in the global markets and yesterday's scary opening hours in the U.S. would seem to test the theory. But the day ended with U.S. stocks showing just modest declines. To be honest, I've never thought the January effect made much sense. Supposedly, stock prices are depressed by tax-loss selling before Dec. 31, and then bargain hunters rush in after the new year. But what about years in which there were few losses, and hence not much tax-loss selling? And why did stocks with big gains rise as much as those subject to tax-loss selling? Perhaps 2008 will also test the theory that stocks rise in election years.
EBay wavers after 4Q report
Shares of online auctioneer eBay Inc. rose Wednesday ahead of its fourth-quarter report, as a Stifel Nicolaus & Co. analyst called the stock his "best short-term idea" -- but retreated in after-hours trading after the report's release. EBay shares rose $1.81, 6.7 percent, to close at $28.94 in advance of the earnings report and before Chief Executive Meg Whitman announced she would soon step down. In extended trading, the stock initially rose but then retreated to $27.50. The stock hit a 52-week low of $26.02 on Tuesday, as fears of a recession hurt stocks around the globe, despite a decision by the U.S. Federal Reserve to cut the federal funds rate by three-quarters of a percentage point to 3.5 percent. In a client note Wednesday, Stifel Nicolaus analyst Scott Devitt said that though eBay is losing e-commerce market share, its competitive position is stabilizing in core areas including liquidation inventory, collectibles and difficult-to-find items, he said.
Sensex nose dives again; Investors lose $150 Bn
Mumbai: Monday, the country's stock markets saw the benchmark index of the BSE shed 2,000 points intra-day before rallying marginally later in the afternoon and sensex closed 1,408 points down at 17,605 suffering a 7.40 percent loss. Still on the second day of the mind-boggling meltdown of stocks, which led to suspension of trading, market seems to be haunted by its severe impact.
On Tuesday, investors lost over $150 billion (Rs 6 lakh crore) within minutes of the opening of the Bombay Stock Exchange. Even after the market opened at 1100 hours, the bears continued playing and within an hour the BSE Sensex was reading down by over 2200 points leading to the suspension of trading for an hour.
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