NEW YORK, Aug 17, 2007 (AFP) – Credit fears have played havoc with Wall Street stock portfolios and US investors could suffer more bruises from fresh upheavals sweeping world markets in the week ahead, despite an emergency rate cut. Confidence was in short supply on Wall Street this past week as investors sold off stocks amid more glum housing news which has spoiled investors’ appetite for mortgage-backed securities and some financial shares.
The Federal Reserve’s suprise action Friday, cutting the interest rate it charges commercial banks and making borrowing cheaper, fueled hopes the Fed will soon move to trim short term rates.
“We expect more volatility in both the credit and stock market in coming days,” warned Frederic Dickson, an equity analyst at the DA Davidson & Co. investment firm.
The blue-chip Dow Jones Industrial Average stock barometer slumped 1.22 percent to 13,079.08 in the week ended Friday after diving and rocketing over 300 points during the week.
The index has lost over 900 points since closing at a record high just over 14,000 on July 19.
The broad-market Standard & Poor’s 500 fell a lesser 0.55 percent in the week to Friday to finish at 1,445.94 while the tech-rich Nasdaq composite tumb