Way down, then up
Rally follows Fed's move

Wednesday, January 23, 2008
By CHARLES HACK
JOURNAL STAFF WRITER

After the stock market took a nail-biting plunge yesterday morning, nervous Downtown Jersey City traders breathed a sigh of relief as the markets made a partial recovery. And now they're holding their collective breath again as they wait to see if the worst is over.

Wall Street rallied some after the Federal Reserve cut the federal funds interest rate by .75 percentage points, to 3.5 percent.

Mariusz Szczerbiski, an accountant with Maple Securities USA, said yesterday afternoon that the over-inflated global market had been correcting itself and that the mood had improved "big time" since the morning, when the Dow Jones Industrial Average fell 465 points.

"Right now it is up - at this point it has been sorted out," said Szczerbiski, after the market eventually closed at a 128-point loss.

A bond salesman who didn't want to be named, taking a cigarette break outside Exchange Place, said that the volatility in the market is "not over by any means." The federal rate cut was a "step in the right direction, but they need to do more," he said.

The Standard & Poor's 500 index, the broad market measure most closely followed by traders, fell 14.69, or 1.11 percent, to 1,310.50, while the Nasdaq composite index lost 47.75, or 2.04 percent, to 2,292.27.

One investor, who refused to give his name, said that there had been a "flight to cash" while brokers worked to figure out where the market is headed.

Some said they were waiting to see if the fed rate gets cut further next week and that they're also awaiting the earnings reports this week of multinational companies like Microsoft and AT&T, and institutions such as Citigroup and Merrill Lynch, which have lost billions through failed mortgages.

Andrew Wetzler, who sells "client solutions" for IBM, was at Lehman Brothers in Jersey City yesterday to meet with clients and said the market was "overreacting this morning" but "calmer heads" had stabilized things by afternoon.

"I can't say it's reached the bottom," but the Federal Reserve's cut "put calm" back into the market, Wetzler said.

The Associated Press contributed to this report.