MELTDOWN FLASHBACK: Wednesday, Oct. 8, 2008

The Associated Press

Central banks around the world make emergency interest rate cuts in an unprecedented effort to jump-start lending.

The Federal Reserve cuts its target for overnight bank loans — known as the federal funds rate — to 1.5 percent from 2 percent, its lowest level in more than four years. Central banks in England, China, Canada, Sweden and Switzerland and the European Central Bank also reduce rates after a series of phone calls over several days between Fed Chairman Ben Bernanke and his counterparts around the world.

For millions of Americans, the Fed's cut means borrowing money becomes cheaper. Home equity loans, credit cards and other floating-rate loans all fluctuate depending on what the Fed does. But will the rate cuts make banks more likely to lend?

Investors aren't so sure. The Dow Jones industrial average opens 200 points lower, then swings 200 points into positive territory within an hour. A late-morning sell-off gives way to an afternoon rally, and the Dow is ahead for the day 30 minutes before the close. But by 4 p.m., it's down 2 percent, or 189 points, and closes at 9,258.