Despite the fact that the Fed cut the federal funds rate on overnight loans between banks to 3.5 percent from 4.25 percent in an attempt to prevent a sell-off in U.S. markets, the Dow Jones Industrial average opened down by more than 460 points.

As we look up at CNBC, the down is currently down 179 points. From the NYT:

“There can be no doubt that the timing of this morning’s move is aimed at supporting global financial markets after yesterday’s global equity meltdown,” Joshua Shapiro, chief United States economist at MFR Inc., wrote in a research note Tuesday morning.

Worldwide, markets continued yesterday’s freak out.

“At this stage, you can say there is panic selling in the market,” said Kwong Man Bun, the chief operating officer of KGI Asia Ltd., a large Asian futures broker. “We don’t think the Hang Seng index has found its bottom yet; the index will continue to go down and will only find its bottom when external markets — namely, the U.S. market — stabilize.”

Meanwhile, at the White House, press secretary Dana Perino talked stimulus packages of unknown size:

“I’m not going to close the door, but I’m not suggesting that anyone believes it has to be bigger” than the $150 billion figure already discussed.
…Perino said the White House is not proposing an even bigger economic package at this point, but she declined to rule one out, either. The sharp decline of markets in the United States and around the globe is tied in part to the perception that Bush’s outlined stimulus package would not do enough to avert a recession.

Perino said the White House does not comment on daily fluctuations in the market. But she did say that people should have confidence in the underlying strength and long-term prospects of the U.S. economy.

“We are not forecasting a recession,” Perino said. “Clearly there is a slowdown.”

Ya think?

White House Flexible on Stimulus Plan [AP]
U.S. Markets Open With a Steep Fall [NYT]
(AP Photo/Richard Drew)

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