U.S. stocks sink again in volatile trading

NEW YORK -- The global sell-off in stocks raged on Wednesday and Wall Street stocks fell in choppy trading despite a coordinated interest rate cut by central banks around the world designed to boost credit markets and investor confidence.

The Dow Jones industrial average opened lower, rose by more than 100 points by 10 a.m. ET, but was negative again within half an hour. By noon ET, stocks had lost more than 200 points, but by 2 p.m. ET, the index was up more than 125. It fell in the last half-four, ending down 200.

At the close, the Dow was off 194.58, or 2.06%, to 9,252.53.

Broader indexes were also higher. The Standard & Poor's 500 index lost 11.66, or 1.17%, to 984.57. The Nasdaq composite index fell 14.55, or 0.83%, to 1,740.33.

Meanwhile, oil prices touched their lowest level this year Wednesday as the government reported a huge spike in crude inventories while giving more evidence of dwindling demand.

Light, sweet crude for November delivery fell $1.11 to settle at $88.95 on the New York Mercantile Exchange. Oil at point fell to $86.05 — the lowest price since Dec. 6, 2007.

Crude has now fallen about 40% since surging to a record $147.27 a barrel on July 11.

But Wednesday's losses were limited by growing speculation that the Organization of the Petroleum Exporting Countries could cut output to keep prices from falling too hard. OPEC officials, worried about declining oil revenue, in recent days have urged members of the cartel not to pump too much crude in a bid to keep prices above $100.

The volatility came despite a coordinated interest rate cut involving the Federal Reserve and several major European central banks. It also comes one day after the blue-chip index fell more than 500 points to five-year lows. U.S. stocks followed sell-offs in Asia and Europe.

Stocks in Japan plunged 9.4%, its biggest drop in more than two decades, pushing the Nikkei 225 index to a five-year low. Shares in England, Germany and France lost 6.5%, 5.9% and 6.3% respectively.

Increasingly, investors on Wall Street and around the world are concerned that all the steps taken by governments and central banks around the world won't be enough to quickly stem the mushrooming credit crisis, which started in the U.S. mortgage market and spread around the world.

In a knee-jerk reaction, "The coordinated easing could be perceived as a sign of just how bad things are," says Kevin Lane, chief market strategist at Fusion Analytics Research Partners.

Lane says fear is on the rise but that investors should "not be in a rush to find the bottom," Lane says. But he adds that spike in panic and pessimism shows "we are getting very close to a buy."

Earlier Wednesday, the Federal Reserve, in concert with the European Central Bank, Bank of England, The Bank of Canada, the Swedish Riksbank and the Swiss National Bank, slashed short-term interest rates. The Fed cut its overnight bank-to-bank lending rate by half of a percentage point, lowering the so-called Fed funds rate to 1.5%. It was the first time banks joined forces to cut rates at the same time in an effort to resuscitate ailing financial markets.