This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Fed Plots Measured Course

Following steep overnight losses in international bourses -- including the Nikkei's worst one-day decline since the Sept. 11, 2001, terror attacks -- U.S. equity futures were pointing to a sharply lower open early Friday -- even scuttlebutt about a potential "crash." Futures quickly reversed following the Fed's discount rate cut at around 8:15 a.m. EDT, and major averages jumped in early trading. But after trading as high as 13,167.68 earlier, the Dow Jones Industrial Average was recently up 130 points to 12,976.

The S&P 500 and Nasdaq Composite were following similar patterns as traders continued to speculate about whether the central bank did too much, not enough or got it just right.

Rate Debate Continues

The central bank wants to relieve the seizure in credit markets without putting the economy in jeopardy. That goal should be lauded.

If this discount window action does the trick, psychologically and otherwise, the job could be done and odds of a near-term fed funds rate cut declined early Friday.

But if Friday's action doesn't ameliorate the pressure on normal financial operations, the risks to the economy on both the inflation and growth side increase.

On the growth side, the risks are obvious: A standstill in normal financing procedures in the economy could lead to higher unemployment and a slower economy. If the Fed believes this is true, they'll want to get ahead of the problem and get the fed fund rate cuts over with. Expect 50 to 75 basis points of cuts by year-end if they go in this direction.
3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
KFN $0.00 0.00%
C $46.28 0.00%
GE $30.75 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs