Economics
Bernanke Backs Calls for Quick Action
The Fed chairman endorses "substantive" rate cuts and congressional efforts for rapid economic stimulus. Critics say it's too little, too late
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Federal Reserve Chairman Ben Bernanke threw his support behind quick and temporary tax breaks, combined with the possibility of "substantive" rate cuts, in testimony before Congress. But he did little to reassure Wall Street the central bank has the wherewithal to steer the U.S. economy out of a possible recession.
Stocks sold off under waves of bad news, including a stunning $9.9 billion fourth-quarter loss posted by Merrill Lynch (MER) and a 25% drop in 2007 housing starts. The Dow Jones industrial average closed down 306.95 points, or 2.46%; the Standard & Poor's 500-stock index dropped 39.95 points, or 2.91%.