Wall Street (That Small Street) Out of Gas and Running on Rumor
Wall St. Soars on Hopes of Rate Cut Fed Official's Speech Notes Risk of Slump
By Neil Irwin Washington Post Staff Writer Thursday, November 29, 2007; D01
A top Federal Reserve official yesterday acknowledged that a downturn in financial markets over the past months has increased the chances of a serious economic slump -- and the stock market soared, as investors took his words to mean that the central bank will cut a key interest rate further.
The Dow Jones industrial average rose 331 points, or 2.6 percent, on top of a 1.7 percent rise Tuesday. That makes for the best two-day span for the Dow in five years, though it is still down 6.2 percent since an October high.
The chief economist over at Bank of America is named Mickey and one has to restrain the temptation to tag him Mouse for a last name.
"The Fed is saying it will ease as necessary to restore order to the financial markets and avoid a recession…