Federal Reserve Rate Cut Disappoints Wall Street Investors.

Publication: The Miami Herald (Miami, Florida) (via Knight-Ridder/Tribune Business News)

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COPYRIGHT 2001 The Miami Herald

Byline: Gregg FIELDS

Mar. 21--The Federal Reserve, expressing concern about the economy's persistently weak pulse, slashed interest rates again Tuesday. That inadvertently produced a bloodbath on Wall Street, which had been hoping for more than it got.

The Fed, the nation's central bank, lowered the so-called federal funds rate by one-half a percentage point, to 5.0 percent. It also lowered the discount rate to 4.5 percent from 5 percent.

But the stock markets had been anticipating a cut of three-quarters of a percentage point in interest rates. So the typically good news of lower interest rates was instead interpreted as a major negative for investors. And that sent stocks into a steep dive.

The Dow Jones industrial average dropped 238.35 points, or 2.39 percent, to...

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