Falling Rates, Rising Stocks?

S&P cautions investors against assuming the Fed's rate-cutting signals an "all-clear" to the subprime crisis

On Friday, Aug. 17, the Federal Reserve cut its discount rate 0.50%, to 5.75%. The equity markets responded favorably to the Fed's action, as it sent a message to investors that the central bank will do whatever it can to alleviate the lending paralysis brought on by the fear surrounding the spread of the subprime worries.

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