NEW YORK (CBSNewYork/AP) — The Federal Reserve guaranteed super-low interest rates for two more years Tuesday — an unprecedented step to arrest the alarming decline of the stock market and the economy. Wall Street roared its approval and finished a wild day with a 429-point gain.

That jump came shortly after the Dow Jones Industrial Average dropped more 170 points.

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The Fed announced that it expects to keep its key interest rate near zero through mid-2013. It has been at that record low since December 2008. The Fed had previously said that it would only keep it low for “an extended period.”

The Fed also said that it expects “a somewhat slower pace of recovery over coming quarter.”

“The traders had been expecting [Federal Reserve Chairman] Ben Bernanke to say something along the lines of easing or maybe some buying up bonds and he didn’t say that.  Instead he gave a pretty bleak assessment of the economy,” market analyst  Debra Borchardt told CBS 2’s John Metaxas.

Oil prices sank $2.03 per barrel to $79.29 within minutes after the statement was released. Gold, considered a safe haven when other investments are tumultuous, rose again to $1,773.60 per ounce, up from its $1,713.20 closing price on Monday.

At Barry’s Estate Jewelry in Rockland County, CBS 2’s Lou Young spoke with owner Barry Fixler about the recent gold rush and flock of people coming in to have their gold appraised.

“Ever since gold topped $1,500, it’s been a frenzy. Hard to keep up with,” Fixler said.

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“It’s really hard to figure out the direction of the market. Overall it seems like it’s an oversold rally,” Borchardt said.

On Monday, the Dow had its worst day since 2008, plunging 634.76 points as fear coursed through global markets. It was the sixth worst point drop ever.

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Several factors seem to be bringing the bears out to maul Wall Street: fears about a slowing U.S. economy, debt problems storming Europe, the recent domestic debt ceiling showdown and the downgrade of America’s credit rating by agency Standard & Poor’s.

There’s also the concern of a self-fulfilling Wall Street prophecy: spooked investors pull their money out, driving stocks lower, spooking more investors and so forth.

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European indexes also closed Tuesday on a relatively positive note.  The FTSE 100 index finished up 95.97 points ( 1.9%).  Germany’s DAX 30 index fell 0.1 percent and in France, the CAC 40 index rose 1.6 percent.

How concerned are you about what’s taking place on Wall Street? Is anyone to blame for this situation? If so, who? Sound off in our comments section.

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