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.

Related: Complete Stock Market Coverage from CBS MoneyWatch

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.

“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.

1010 WINS’ Terry Sheridan reports: New Yorkers Keeping A Cool Head

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.

WCBS 880’s Paul Murnane On Falling Oil Prices

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.

(TM and Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

Comments (13)
  1. Joeastroturf says:

    Obama please don’t help the stock market or jobs out anymore. thanks for keeping quiet today . Stay on the golf course or play some hoops. He has nothing to worry about Standard & Poor’s he’s creating a shadow Standard & Poors as we sleep. He did the same thing with the National Black Chamber of Commerce. He got rid of Harry Alford, the president and CEO of the National Black Chamber of Commerce , a veteran and stand up guy and the media never even reported on it. He then created his own phony Black Chamber with clueless socialists.Even Barney Frank says we can just ignore it. He knew how to do that with practice with his boyfriend at Fanny Mae. Mr Alford blasted President Obama’s anti-business administration and labeled the administration “Marxist” and “fanatical.” on the Laura Ingraham Show. He said Obama told the San Francisco Chronicle that he wanted $6 to $7 a gallon so we can reduce our footprint.
    Look up “black_chamber_of_commerce_president_blasts_marxist_brownshirt_obama” on youtube
    Gotta run I think I hear the IRS coming.

    Check out song called “teapartiers I can’t hear you” on youtube

    Here’s a verse

    Here’s a verse

    Doctors are retiring earlier but we’re getting 17000 new IRS
    This is how Obama creates health care jobs I guess
    For 235 years this country’s been God’s blessing.
    Now he’s following Cloward and Piven’s to bankrupt the country I’m guessing
    If Obamacare gives Grandma and Grandpa a scare
    Think how when their rationed and die earlier we’ll save on healthcare

  2. Ryszard Ewiak says:

    This is not the end of the crisis. The scenario resulting from the analysis of the Bible: The economic and political earthquake; the disintegration of the European Union and NATO; the return of Russia; the nuclear war. (Daniel 11:29b, 30a; Matthew 24:7; Revelation 6:4) It will be “the beginning of birth pangs”. (Mark 13:8)

  3. karlson says:

    The money that was “wiped out” and lost by the market dropping so much was made up by a select group of professionals. When the oil prices were going up to $100/barrel, they were making money by bidding it up. Now they just bet it would go down and sold their positions without ever taking delivery of so much as one drop of oil.

  4. Ellen says:

    President Franklin D Roosevelt once said that ” There is nothing to fear but fear itself.” That was during World War 11 and is as true now as it was then.

    1. Michael H. says:

      What ever happened to World Wars 3 through 10? You’re leaving out a whole lot of history here.

      Pro-tip: Roman Numerals for “2” is “II”. Two I’s, not two 1’s

      1. Ellen says:


      2. Michael H. says:

        You’re welcome, Ellen. I hope to be able to correct your asinine posts for many days to come. Have a wonderful day.

  5. UNCLE TOM says:

    looks like obama got us out of another tight spot,,,,,,,4 more years,4 more years,4 more years

    1. karlson says:

      Are you serious?

  6. Reverend Rev says:

    The simplest explanation is usually the simplest. It’s obvious that S&P dropped the government’s rating for the purpose of INSIDER TRADING and MARKET MANIPULATION:

    Step 1: Borrow stocks and sell high.

    Step 2: Drop the U.S. credit rating.

    Step 3: Wait for markets to plummet.

    Step 4: Buy low and return stocks.

  7. Warhawk says:

    Without doubt Wall Street is to blame for what is going on, with the politicians being culpable for enabling the Wall Street to slowly destroy the US. Despite the fact that the temple of capitalism (that is the NYSE) hiding behind a huge American Flag, they are not concerned with the US at all. They look out for the interests of shareholders, but what is even more troublesome for their own interests at the expense of other investors. The last thing on their mind is the well being of Main Street. It is the Wall Street that is to blame for stopping the “tricle down” economics in 2008 and then doing absolutely nothing for 3 years to turn things around. It is possible that in their chase after profit, they are unwilling to see the damaging effects of their “take no prisoners” approach to doing business. But the situation is clear now. American consumer is no longer willing to spend their money if their own future is uncertain, the insane layoffs in 2008, 2009, 2010 have left the us population scared and uncertain of what the future will bring. At the same time, Wall Street boasted that their profits are better than ever and that the economy is on the rise – really? They don’t seem to notice the vast expanse of land between the east and west coasts – that is the part of the country that needs to grow before we can say that the US economy will grow. But the future is not bright, there is no clear catalyst that would break the US out of this state os stagnation. It is possible that is will take the bursting the bubble that is China for the situation in the US to improve. Most Americans see this situation as hopeless…

    1. karlson says:

      Very true. The economy right now is based upon consumerism and spending with a credit card. That is non-sustainable because people are unemployed and underemployed. Wages and salaries have not kept pace with the cost of goods and services. The idea of going to a mall or a store and buying something in response to an ad is slowing down. Even buying on line has to be less than it was in the past. People still need to replace things such as a worn out mattress or tires and brakes on their cars. But most cannot afford to replace their worn out car with a new one, or one that is 2 or 3 years old.

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