Dow sinks 2.9% after rate cut fails to stem market's dread

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Fear and uncertainty continue to control Wall Street, and stocks fell sharply Tuesday after an emergency interest-rate cut by the Federal Reserve failed to reassure markets wracked by worries that a fast-spreading virus will cause a recession.

The Dow Jones Industrial average sank 785 points, or 2.9%. It had surged 5% a day earlier on hopes for a broader set of stimulus measures.

After popping to a 1.5% gain shortly after the Fed's announcement, the S&P 500 swung between modest gains and losses for about an hour before turning decisively lower. The index ended the day down 86.86 points, or 2.8%, at 3,003.37. It pared a loss that reached 3.7% in the mid-afternoon, and it marks the eighth drop in the last nine days for the index.

But doubts are high about whether the medicine provided by central banks can be as effective this time around. Lower rates can encourage shoppers and businesses to borrow and spend more, but they can't reopen factories that have been shut or recall workers out due to quarantines. "The nature of today's announcement could send the wrong signal to market participants, including individual investors who are concerned with recent market volatility," said Roger Aliaga-Diaz, chief economist of the Americas at Vanguard.

 

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Hmm Would That be an 'Outbreak' of 'Dread'? ChickenLittleHasTheFlu 🤡

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