Selloff Drives Dow Down 171

Two-day rally snaps on renewed jitters over mortgage crisis
By Jonas Oransky,  Newser Staff
Posted Jan 25, 2008 4:30 PM CST
Selloff Drives Dow Down 171
Angela Sabatino, center,of NYSE Euronext talks to a colleague on the floor of the New York Stock Exchange, Friday, Jan. 25, 2008. Stocks gave up some of their early gains Friday as investors grappled with rumors that another hedge fund may have run into financial trouble. (AP Photo/Henny Ray Abrams)   (Associated Press)

A 2-day rally sputtered today as the Dow fell 171.44 to 12,207.17 on new jitters about a touchy market. Even strong quarterly reports from Microsoft, Caterpillar, and Honeywell couldn’t keep investors buying this morning; said one economist, “The market is still in a very fragile state.” The Nasdaq slid 34.72 to 2,326.20; the S&P 500 lost 21.46 to 1,330.61.

Caterpillar reported a fourth-quarter net-income boost of 11%, and Honeywell’s net income rose 18%. Some investors are heeding advice to hold out for low interest rates, the Wall Street Journal reports. Some say the Fed may eventually cut its key rate from 3.5% to 2%, with a half-point slash expected after 2 days of meetings end Wednesday. (More Dow Jones stories.)

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