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Stocks Drop at the Open; Long Bond Soars

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


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


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

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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.

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