Stocks mostly lower after late slide follows Fed rate cut

ByABC News
October 30, 2008, 7:01 AM

NEW YORK -- Wall Street got the interest rate cut it wanted, but still turned in a baffling late-day performance Wednesday, shooting higher and then skidding lower in the very last minutes of trading as some investors rushed to cash in profits after the market's big advance. The major indexes ended the day mixed, with the Dow Jones industrials falling 74 points only the third time in October that the blue chips had just a double-digit close.

"It was a panic sell in the last two minutes," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams in New York, referring to reports that GE was aiming at 2009 profits to be little changed from 2008. The reports were subsequently called into question, and a GE spokesman said the statements were taken out of context.

A spokesman for GE said that the Dow Jones report quoting Chief Executive Jeff Immelt as forecasting flat profit in 2009 was "completely out of context and inaccurate."

Immelt's comments, made at a business group dinner in Spain, were a response to a hypothetical question about how to motivate managers during a time of financial crisis, said Russell Wilkerson, a GE spokesman.

"There was no forecast, no guidance given here," Wilkerson said.

Because of the last-hour confusion, it was likely that it would take the opening of trading on Thursday to get a better read on how the market feels about the Fed's rate cut and its accompanying economic statement. At the same time, the Commerce Department's expected reading on the gross domestic product for the third quarter will most likely shape trading.

The market waffled while it was still digesting the Fed's economic assessment statement that accompanied the rate cut, but advanced for most of the final hour of trading. Policymakers spelled out a weakening of economic conditions in the U.S. and abroad, citing first a drop in spending by American consumers.