Stocks fall after Fed minutes |
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Tue, 20 Nov 2007 20:08
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NEW YORK (AP) - Wall Street sank Tuesday after the minutes from the Federal Reserve's last meeting gave investors little, if any, hope that another interest rate cut is in the offing.The minutes from the Fed's Oct. 30-31 meeting sketched out some of the market's great concerns: slower economic growth, but also the risk of higher inflation from the continually sinking U.S. dollar. Because of Fed officials' concern with inflation, their decision to lower rates for a second straight meeting 'was a close call,' the central bank said.Meanwhile, the central bank issued an economic forecast that predicted moderating inflation in 2008, but that also augured slower economic growth and slightly higher unemployment. Those trends raised Wall Street's concerns about the effect of a slowing economy on corporate profits.It was a rocky day on Wall Street, which saw stocks surge, and then retreat as investors grew nervous about hefty losses at Freddie Mac, cash problems at Countrywide Financial Corp. and the release of the Fed minutes. The major indexes made it into positive territory for a brief time after the Fed minutes were released, but the market's bleak reading of the central banks' comments took stocks down.The Dow fell 56.65, or 0.44 percent, to 12,901.79.Broader stock indicators also retreated. The Standard & Poor's 500 index fell 5.55, or 0.39 percent, to 1,427.72, and the Nasdaq composite index fell 12.88, or 0.50 percent, to 2,580.50.Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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