New York (CBS\AP) -- Wall Street managed a tentative advance in early trading Wednesday as investors questioned whether an emergency interest rate cut would be enough to revive credit markets and ward off a global recession.
Stocks initially plunged at the opening of trading as the market took a bleak view of the credit situation. Some bounceback after the Dow Jones industrials fell 875 points this week was to be expected - the question was whether some optimism was in fact beginning to take hold. And it was very likely that the market would give back its early gains.
The Federal Reserve and four other central banks cut interest rates by a half-point aimed at restoring confidence in the market and help end the global financial crisis.
"With all of this occurring as a coordinated effort is showing that everybody out there is trying to fight this thing, and that should bring some confidence back to the market," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group. "But, the big question now is can the credit market open for business."
The Fed noted in a statement that the market turmoil posed a further threat to an already shaky economy; it was joined in the rate cut by banks including the European Central Bank, Bank of England, The Bank of Canada, the Swedish Riksbank and the Swiss National Bank.
The Dow rose 35.44, or 0.38 percent, to 9,482.55 in the first half-hour of trading.
The Standard & Poor's 500 index rose 6.03, or 0.61 percent, to 1,002.26. The Nasdaq composite index was up 9.14, or 0.52 percent, to 1,764.02.
The global interest rate cuts were done to in hopes it would increase access to credit for struggling markets, noted Fox News Business analyst Alexis Glick told CBS' The Early Show. "This is one of many steps," Glick said of the rate cuts.
But analysts were cautious about the impact of the central banks' coordinated action.
"At first blush, while this is a big step, it is unlikely to prove sufficient to stem the rot. Additional rate cuts are likely and further measures to inject liquidity and re-capitalize banks are needed," said Marc Chandler, global head of currency strategy at the investment firm Brown Brothers Harriman.
Photo: A television screen at the New York Stock Exchange shows the decision of the Federal Reserve to lower interest rates, Wednesday Oct. 8, 2008. (AP Photo/Richard Drew)
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