Stocks pare some losses after rate cut

Updated: 2008-01-23 08:13

But like interest rate cuts, a stimulus package, which would first need the approval of Congress, would not work immediately.

"Economists are not generally impressed by a fiscal stimulus, because it takes a long time to produce the desired effect," said the Credit Union National Association's Schenk. He explained that some people, shrewdly would save the money they receive instead of spend it.

European stocks joined their U.S. counterparts in rebounding after the Fed's rate reduction. Britain's FTSE 100 rose 2.90 percent, France's CAC-40 rose 2.07 percent, Germany's DAX index pared its loss to 0.31 percent.

In Asian trading, which ended before the Fed move, Japan's Nikkei stock average closed down 5.65 percent - its biggest percentage drop in nearly a decade. Hong Kong's Hang Seng index lost 8.65 percent a day after showing its biggest losses since the Sept. 11, 2001, attacks.

In other trading Tuesday, the yield on the benchmark 10-year Treasury note, which moves opposite its price, sank to 3.48 percent from 3.63 percent late Friday.

Crude oil prices fell 72 cents to settle at $89.85 a barrel on the New York Mercantile Exchange on concerns that a weak economy will dampen energy demand. The dollar fell against most other major currencies except the yen, while gold rose.

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