Re: Emergency Fed actions. This from WSJ OnLine: ... Wall Street managed to bounce back as the afternoon wore on, supported by a steady recovery in the dollar. The dollar rallied back after the Federal Reserve Bank of New York, concerned that the foreign-exchange market had become too illiquid to function properly, called a number of trading desks in New York and check into trading activity, the Dow Jones Newswires reported. The New York Fed had no comment.
The calls -- and unsubstantiated intervention rumors -- came into the market as the dollar plunged towards a 1997 low of 110.60, a level which prompted a few dealers to buy. On the rebound, the dollar jumped six yen within 20 minutes. And by the close of trading in New York, the U.S. currency had completely reversed itself.
That turnaround set the stage for the blue chip's recovery, Mr. Scarlata said. "The dollar actually finished up on the day on a weighted basis, and that gave investors some confidence," he said. He added that, at their lowest levels Thursday, many major market indexes traded below their Aug. 31 bottom before bounding higher. That also gave some investors the courage to bargain hunt amid the wreckage. "I view this market as being completely sold out and I would expect at these levels we would begin to see the start of a sustained recovery," he said.
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