USA: Indexes cut losses after Federal Reserve's 2nd cash injection

U.S. stocks pulled back sharply from the morning's plunge on Friday (August 10) after the Federal Reserve injected cash into the banking system for the second time today, but they were will still down due to fears about the extent of losses from U.S. subprime mortgages. Earlier, stocks had quickly extended their sharp fall despite moves by major central banks -- including the U.S. Federal Reserve, the European Central Bank and the Bank of Japan -- to inject more liquidity into financial systems to calm markets. Uncertainty about the extent of the mortgage turmoil kept investors on edge, a day after U.S. stocks suffered their second-worst slide of the year. People on Wall Street were optimistic that drops in the market were only short term. "A bear market is a pretty long time period. I don't think it's that long. I just think we had a nice little pull back now, but we really need to have some conviction. Until we have that, the mood will feel like a bear market," said Dodge Dorland. The Dow Jones industrial average was down 105.52 points, or 0.80 percent, at 13,165.16 -- after earlier falling more than 200 points to a session low at 13,057.86. The Standard & Poor's 500 Index was down 9.37 points, or 0.64 percent, at 1,443.72, also well off its session low at 1,429.74. The Nasdaq Composite Index was down 23.20 points, or 0.91 percent, at 2,533.29, after earlier falling as low as 2,503.16. Analysts say the impact of mortgage losses would make credit conditions worse, hurting corporate takeovers and stock buybacks -- two forces behind the market's rally to record levels this summer before the recent turbulence.

ITN Source | August 11, 2007

Tags:. .mornings. .points. .moves. .systems. .short