Wall Street on-hold by Claudia Sonea

After this summer when stock market indexes fell from record highs to big time losses, Wall Street awaits Fed's decision on Tuesday. Fears about home sluggish, economic growth, unemployment, retail sales rattled investors and rushed Fed to take a decision concerning the rate cut. The main question remains if the interest rates will be lowered or not. Bob Doll of BlackRock Inc. reveals that if the Federal Reserve lowers rates by a quarter of a percentage point, the stock market crisis will still not come to an end. Also Swiss Re chief U.S. economist says that even though investors are crossing their fingers hoping there will be a half-point rate cut, policy makers are not keen on offering them satisfaction. Moreover, the central bank, which hasn't reduced the benchmark fed funds rate since 2003, fears it might look like bailing out the investors. To all this the it adds the weakening of dollar strength in face of the euro and the Dow Jones industrial average 4 percent above 14,000.41. Last week the expectation of a rate cut and the corporate good news about returning to normal on the bond market- a safe source of quick money- brought gains to investors. The Dow closed with a raise of 2.51 percent, the Standard & Poor's 500 index rose 2.11 percent, and the Nasdaq composite index rose 1.42 percent. However, the two main concerns of the Fed remain the core inflation- food and energy prices- and the economy. Therefore Kurt Karl states that despite the fact that it might look like bailing out, it is also an action of protecting economy. Sluggishness in housing and an up tick in jobless claims will be very little affected even after Fed'd decision. Tuesday is a special day for investors, but after the meeting Federal Reserves might raise more question than it is supposed to answer. Wall Street is on-hold until after Tuesday afternoon. Will there be a compromise and a new direction towards solving the stock market issue? Don't go away more to come.

related story: http://news.yahoo.com/s/ap/20070916/ap_on_bi_ge/wall_street_week_ahead;_ylt=AvSoQHG993sQN1Ypax3q_rys0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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