Stocks Drop at the Open; Long Bond Soars

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Stocks have fallen early on after markets overseas sustained sizable hits.

The

Dow Jones Industrial Average

was down 53 to 8027. The

S&P 500

was down 10 to 1039, while the

Nasdaq Composite Index

was down 16 to 1718 and the

Russell 2000

was down 3 to 363.

The 30-year Treasury bond was recently up 21/32 to 106 27/32, yielding a record-low 5.05%.

The early losses came after an overseas selloff as investors dumped equities on disappointment about the Fed's slight slicing of short-term interest rates yesterday. Also weighing on the market was more bad news out of Japan. The

Nikkei

fell 3%.

In a move to "cushion" the nation's economy against weakness in overseas economies and "less accommodative financial conditions domestically," the

Federal Open Market Committee

yesterday sliced the federal funds target rate by 25 basis points, to 5.25%.

The Fed, in a statement, said the target should now "be consistent with keeping inflation low and sustaining economic growth going forward."

The FOMC left the discount rate unchanged at 5%.

Some analysts believe yesterday's rate cut was only the beginning of a series of rate cuts to help keep the U.S. economic engine rolling as it fights off a global economic slowdown that has already put a dent in corporate profits.

Most Up at Open -- NYSE

A.G. Edwards (AGE) - Get Report, up 1 to 31 1/2

.

Most Up at Open -- Nasdaq

Paychex (PAYX) - Get Report, up 1 3/4 to 48

: Paychex replaces

Dresser Industries

(DI)

in the S&P 500 today, following Dresser's completed $7.7 billion merger with

Halliburton

(HAL) - Get Report

yesterday.

Most Down at Open -- NYSE

Telebras (TBR) , down 2 17/32 to 128 31/32

.