In New York Wednesday, the surprise emergency Fed cut of 0.75% in the federal funds rate to 3.5% on Tuesday, again failed to tame the bears as sentiment is still dominated by fears of a US recession.
The Federal Reserve's rate-setting Federal Open Market Committee is to have a scheduled meeting on Jan 30/31 and the markets are expecting a further cut of 0.50%.
On Wednesday morning, the Dow Jones Industrial Average was off 185 points, or 1.55%, at 11786. The Standard & Poor's 500 was off 1.91%, or 24 points, at 1287. The Nasdaq Composite Index was off 2.67%, or 61 points, at 2231.
Dow component Pfizer reported that fourth-quarter net income fell 70%, without a gain on a unit sale in the 2006 comparison and the company's top-seller, the Lipitor anti-cholesterol drug, posted its first yearly sales decline. However, the world's top drug company raised the outlook for 2008 and boosted its sales view, sending shares almost 1%.
Mobile phone company Motorola reported a 84% plunge in fourth-quarter net income on restructuring charges, and the said it will post a first-quarter loss. Motorola shares plunged more than 17.6%.
Nouriel Roubini, chairman of consulting firm Roubini Global Economics, was the only member of last year's World Economic Forum panel in Davos to forecast a significant US downturn as a result of what he termed the "three bears" -- a credit crunch, a bursting housing bubble, and soaring energy prices.
"It's not about a soft landing or a hard landing," he said today in relation to the US economy, but "rather how hard a landing it will be."
"We're seeing a financial system that is under severe stress," Roubini said. "The Fed cannot prevent this recession from occurring. In this case the US is going to have a protracted case of pneumonia," he added.
Live US Market Indices
European stocks plunged again Wednesday and the Dow Jones Stoxx 600 Index fell 2.6% and national benchmarks dropped in 17 of 18 markets in Western Europe. The UK's FTSE 100 slid 1.78%; France's CAC 40 lost 4.255 and Germany's DAX Index fell 4.31%.
In Dublin, the ISEQ Index fell 0.35% one of the lowest decliners.
National benchmarks - Europe
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Currencies
The euro is trading at $1.4574 and at £0.7474.
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Commodities
Crude oil for March delivery is trading on the New York Mercantile Exchange (Nymex) at $87.44 per barrel - down $1.77 overnight.
