On the New York stock exchange the opening bell heralded the start of a January sale. The massive sell-off which wiped billions off the value of stocks in Europe and the Far-East yesterday continued in America, as traders returned from a day’s holiday to worries that the US economy is heading for recession.
Investors were dumping shares, pushing the Dow Jones and the NASDAQ into negative territory. And all that despite an emergency interest cut from the Federal Reserve, hacking a massive three quarters of a percentage point off two important rates.
The Fed has not made such a swingeing rate cut since October 1984. Some traders called it Central Bank panic. Some said it would ease matters, but would not stop the slide to recession.
On the European markets, it has been a rollercoaster day, driven by rumour and fear that any US recession would have a global knock-on effect. But the Fed’s rate-cut eased the jitters somewhat.
The FTSE in London see-sawed through Tuesday – one minute positive, the next negative, and then back again – but closed the day regaining some of Monday’s losses, up 2.9 per cent.
All other European exchanges – bar Frankfurt and Moscow – rebounded from negative positions earlier in the day.
Oil also stemmed losses, Brent crude recovering to close nearly 1 per cent up on the day.