MW: U.S. stocks brush off opening losses to tilt higher
By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) - U.S. stock indexes pulled higher on Wednesday, brushing aside opening losses after the Federal Reserve axed interest rates in a synchronized move with other central banks around the world in another effort to stem the panic freezing the credit markets.
The Fed cut its key lending rate by half a percentage point, bringing it down to 1.5%.
The European Central Bank trimmed its key refinancing rate to 3.75% from 4.25%, while the Bank of England cut its rate to 4.5% from 5%. China's central bank slashed its one-year benchmark lending and deposit interest rates, while the Bank of Japan sat out the moves, but issued a statement backing the actions, which also included rate cuts by the Bank of Canada, the Swiss National Bank and the Swedish Riksbank. See full report.
"If we have big sell-off into the morning with strong volume, I'd like to see a sharp high volume turnaround. If we do get that, buyers will begin stepping in," said Robert Pavlik, chief investment officer at Oaktree Asset management.
Off more than 200 points at the start, the Dow Jones Industrial Average was more recently up 13.06 points at 9,460.17.
Weighing on the blue-chip index, Bank of America Corp. shares fell 8.1% after the company priced a secondary offering of common stock below its closing price, with the move diluting existing shares by about 10%. Read story.
Off the Dow, shares of MetLife Inc. also took a hit, down 11.3%, after the insurer's late Tuesday announcement that it would sell 75 million shares to bolster its capital. MetLife also withdrew its prior forecast, saying current conditions make projections difficult. Read Financial Stocks.
The S&P 500 gained fractionally to 996.46, while the technology-laden Nasdaq Composite declined 3.62 points to 1,758.5.
Overseas, Asian markets crumbled as investors alarmed by deteriorating financial markets dumped stocks to raise cash, sending several indexes to multi-year lows. Read Asia Markets.
In London, shares rebounded from near five-year lows. See London Markets.
On Wednesday, U.S. stocks declined for a fifth session straight, prolonging a sharp sell-off that had the S&P 500 ending at a five-year low.
