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What a roller-toaster day on Wall Street! Dow was up by more than 270 points in the first 15 minutes following the open and was down by more than 110 points during the last 15 minutes before closed the day basically flat. The US Fed surprised the world this morning by announcing that five central banks led by the Fed would move in concert to supply liquidity through auctions. Although the Fed officials immediately denied that the news had anything to do with the criticism following yesterday’s interest rate decision, the timing was a little suspicious. Wall Street, however, didn’t buy the idea that injecting liquidity into the financial system would alleviate the credit crisis as the financial sector was quickly turning into negative territory after the market open. Although apparently investors are bearish on the outlook of the financial sector, I think it is equally important (if not more) to remember that it is usually not a wise choice to fight against the Fed. Things will become much clear when the Fed holds its first such auction on Dec 17th. Oil price was up by more than 4% and now is back above $93. For the year, it is up by 54%. Tomorrow we are going to get the earning report from Lehman Brother and the market will certainly pay attention to how the brokerage has fared during the tough quarter ending in November. |
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