Stocks Finish Lower; Bush, Candidates Back Rate Cuts

wspa.com offers a complete rundown of the day’s economic news:
    NEW YORK (AP) - Stock prices have finished lower again, after
swinging back and forth in a wide range today. The Dow ended the
day with a drop of about 200 points.
    The day began with interest rate cuts by central banks around
the world.
    The Federal Reserve cut its key rate a-half percent to 1.5
percent.
    Treasury Secretary Henry Paulson says global financial markets
remain severely strained, underscoring the need for quick action to
implement the government’s 700 billion-dollar rescue program.
    Paulson said all the financial market turmoil has seriously
affected the economy, but he said the administration is moving
quickly to begin the largest government rescue effort in history.
    He said even with this program to buy bad assets from financial
institutions, some banks will fail. He also called for patience
saying “the turmoil will not end quickly and significant
challenges remain ahead.“

U.S. stocks in choppy trade
NEW YORK (AP) - Stock prices have seen more volatile trade on
Wall Street, moving between positive and negative territory so far
today.
    Before the opening bell, the Federal Reserve was joined by other
central banks in cutting benchmark interest rates. Analysts call it
another needed step aimed at breaking the credit crunch that has
put a stranglehold on the global economy.
    As a demonstration of those troubles, retailers reported
generally downbeat September sales numbers this morning.

Global markets slide again despite shock rate cuts
    LONDON (AP) - World markets have been down again today, despite
a coordinated rate cut by top central banks aimed at shoring up
confidence in the financial system.
    The Bank of England, the European Central Bank and the Federal
Reserve cut key interest rates by a half-percentage point. The
banks of Canada, Sweden and Switzerland also took part in the rate
cut. Separately, China cuts its rate as well.
    The cuts came as markets in Asia and Europe took another
battering and Britain stepped in with 50 billion pounds for the
government to support banks by taking stakes. Russia closed its
main stock market for two days.
    The early boost to stock markets provided by the rate cuts soon
faded amid severe stresses in lending markets. One analyst wasn’t
surprised. He said rate cuts are “all very well, but they do not
get to the root of the problem.“

Coordinated rate cuts welcomed by White House, Obama, McCain
    WASHINGTON (AP) - The Fed’s latest move to thaw frozen credit is
being welcomed by the White House and the two major party
presidential candidates.
    The Federal Reserve announced it was cutting its key rate by a
half-point to 1.5 percent, in a rare coordinated move with other
major central banks. The Bank of England also cut its rate by a
half-point, as did the European Central Bank. China, Canada, Sweden
and Switzerland also cut rates.
    The White House calls it “important and helpful” that the
central banks worked together to address the credit crisis.
    Barack Obama says “this is a global crisis that requires a
global solution” and he supports the coordinated action, but he
adds that “more urgent and vigorous action is necessary to stem”
the crisis.
    Meanwhile his Republican rival John McCain is expressing hope
the action will contain the “financial crisis spreading across the
globe.“

White House: AIG execs’ retreat `despicable’
    WASHINGTON (AP) - The White House is harshly criticizing
American International Group in the wake of a congressional
investigation showing that some of its executives spent hundreds of
thousands of dollars on a retreat just days after accepting a
federal bailout.
    Lawmakers investigating the retreat said that it did not include
anyone from the financial products division that nearly drove the
company under. But they said they still were angry that executives
of AIG’s main U.S. life insurance subsidiary spent $440,000 on the
getaway. The retreat at a southern California retreat included spa
treatments, banquets and golf outings.
    White House press secretary Dana Perino called it “pretty
despicable.“

Treasury to sell more debt to deal with borrowing 
WASHINGTON (AP) - The Treasury Department, facing huge borrowing
needs because of the government’s $700 billion rescue program, says
it will increase the size of Treasury securities being sold to the
public.
    The Treasury said Wednesday it will expand the number of
Treasury securities which are currently being traded as a way to
boost borrowing and fund programs such as the $700 billion
financial bailout plan.
    In a statement, the department said this will also deal with
what it called “severe dislocations in the market.“ The demand
for safe Treasury securities has soared during the current credit
crisis.

Fed Cuts Interest Rate
WASHINGTON (AP) - The Federal Reserve has ordered an emergency
interest rate cut of a half a percentage point to cope with the
worst financial crisis since the 1929 stock market crash.
    Fed Chairman Ben Bernanke and his colleagues ratcheted down
their key rate by 0.5 percent, to 1.5 percent. The action revives
the central bank’s rate-cutting campaign which had been halted in
June out of concerns that those low rates would worsen inflation.
Since then, however, economic and financial conditions have
dangerously deterioriated, forcing the Fed to reverse course.
    The fact that the Fed felt it could not wait until its regularly
scheduled meeting late this month underscored the urgency of the
situation.