9:27 am - US markets did not like FOMC rate cut of 25 basis points and selldown at late trading hours.

The KLCI has some support due to crude palm oil but react to bad news of DJIA -294 pts fall.


The Lowdown

Wall Street did not get everything it wanted for the holidays when Federal Reserve lowered the federal funds rate by 25 basis points to 4.25%.
Stocks took a dive on Tuesday afternoon as traders scoffed at language in the Fed's policy statement, which offered no assurance of another cut. The Dow Jones Industrial Average fell 294 points to 13433, its biggest drop since Nov. 1. The Nasdaq lost 67 at 2652, and the S&P 500 gave back 38 to 1478.
The rate cut had been widely expected, as recent speeches from Fed governors and Chairman Ben Bernanke had portrayed the economy as slowing. However, the language of the policy statement suggested the Fed's next move is unclear. "Recent developments, including the deterioration in financial market conditions, have increased the uncertainty surrounding the outlook for economic growth and inflation," the Fed wrote.
There had been some mystery surrounding this Fed meeting. Economists appeared certain that the Fed would make its third consecutive cut in as many meetings. However, some economists had gone so far as to predict a cut of 50 basis points.