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Wall Street headed to a shaky start Tuesday
after a huge sell-off the previous session, with investors waiting
to see if central banks would try to alleviate the ongoing turmoil
in the credit markets by cutting interest rates.
      

Australia's central bank cut interest rates by the largest
amount since 1992 in a surprise move, and that reignited hopes that
others including the Federal Reserve and European Central Bank
might follow. The move helped Asian markets, and later European
bourses, rebound from a global rout in stocks on Monday.
      

U.S. investors were optimistic early in the morning, but that
upbeat sentiment was receding when no Fed cut was announced in the
hour before trading began on Wall Street.
      

Investors believe a rate cut will help reanimate the credit
markets that have been stagnant for weeks. The markets seized up
after the failure of Lehman Brothers Holdings Inc., and banks have
been reluctant to lend to most customers, including other banks,
fearing they won't be repaid.
      

Dow Jones industrial average futures gave up an earlier moderate
gain and fell 12, or 0.24 percent, to 9,952. Standard & Poor's 500
index futures rose 2.90, or 0.27 percent, to 1,056.20, while Nasdaq
100 futures rose 3.50, or 0.25 percent, to 1,410.00.
      

In Asia, the Nikkei 225 closed 3.58 percent lower, responding to
a turbulent session Monday on Wall Street, where the Dow Jones
industrials skidded as much as 800 points before closing with a
loss of 370.
      

Europe markets were mixed after being up uniformly earlier. In
Britain, the FTSE-100 rose 1.16 percent, Germany's DAX fell 0.21
percent, and France's CAC-40 rose 1.14 percent.
      

Financial markets around the world have taken a bleak view of
the global economy, believing that government bailouts including
the $700 billion plan to rescue battered U.S. banks won't in the
near term limit the damage to the banking systems of many
countries.
      

Monday's sell-off put the Dow below 10,000 for the first time in
four years, and that will likely bring some buyers into the market
looking for bargains. Wall Street rallied in the final 90 minutes
of trading Monday, with some of the buying driven by speculation
that a rate cut was in the offing.
      

Both Fed Chairman Ben Bernanke and European Central Bank
President Jean-Claude Trichet have speeches scheduled Tuesday, and
the Fed is due to release minutes from the last interest-rate
setting meeting.
      

Though not giving the market a rate cut that many traders have
been clamoring for, the Fed has taken other steps to help unclog
the credit markets. On Tuesday, policymakers provided more details
about when it will make $900 billion in short-term loans available
to squeezed banks.
      

The loans - part of an effort to ease intensifying credit
stresses - are made available to banks through auctions. The Fed,
in coordination with other countries' central banks engaged in
similar efforts, laid out dates that it will conduct the auctions
through the rest of this year.
      

In addition, the Fed is working with the Treasury on a plan to
buy commercial paper, the short-term financing mechanism that many
companies rely on to fund day-to-day operations, according to a
person with knowledge of the plan. The person asked not to be
identified because the plan is still being put together.
      

Traders might get a better idea of what central bankers are
thinking when the Fed releases minutes from its Sept. 16 meeting.
Policymakers, who will meet again later this month, previously left
its key interest rate unchanged at 2 percent.
      

Concerns about the credit markets still pushed investors into
the relative safety of government debt. Investors moved into
longer-term Treasury bonds, with the yield on the 10-year note fell
to 3.48 percent from 3.58 percent late Monday.
      

However, speculation that the Fed might cut interest rates
caused yields on shorter-term debt to rise. The yield on the
three-month Treasury bill rebounded to 0.64 percent from 0.50
percent late Monday.
      

Demand for Treasurys remains high because of their safety;
investors are willing to take extremely low returns just to have
their money in a secure place.
      

Oil prices rebounded to near $90 Tuesday, a day after plunging
to an eight-month low on concerns a global recession will undermine
demand for crude. Light, sweet crude rose $3.07 to $90.88 a barrel
in electronic trading on the New York Mercantile Exchange.
      

In corporate news, Bank of America Corp. is expected to fall
after reporting late Monday that profits fell 68 percent during the
third quarter. The bank also said it will raise $10 billion by
issuing common stock and slashed its dividend.
      

Technology stocks got a boost after chip maker Advanced Micro
Devices Inc. said it will spin off its manufacturing businesses
into a new joint venture with Abu Dhabi-backed Advanced Technology
Investment Co. AMD said the deal will dramatically cut costs and
allow it to better compete with chief rival Intel Corp.
      

Wall Street is also looking for Alcoa Inc. to unofficially kick
off earnings season when it releases results after the closing
bell. The company is expected to report a profit of 51 cents per
share, down from 55 cents in the year-ago period.
      
      

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Business and Economic News

Wall Street headed for a slightly higher open
Tuesday amid hopes that central banks around the world will cut
interest rates to help alleviate turmoil in the credit markets.

YOSHIKAZU TSUNO/AFP/Getty Images

Wall St. outside of the New York Stock Exchange

Wall Street looks to recover after global rout

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