Markets Plunged Despite President Obama's Reassurance

I meant to post this yesterday. And Stormbringer provides extra incentive, "BARACKALYPSE NOW: IT TANKED AS HE TALKED!"

And the latest at Wall Street Journal, "Markets Sink Then Soar After Fed Speaks":

The Federal Reserve sent investors lurching from worry to hope as it warned that the economy would remain weak for some time but said it was prepared to take further steps to shore it up.

The Fed's statement, which included plans to keep interest rates near zero for at least the next two years, ultimately sent the Dow Jones Industrial Average up 4%, its biggest daily gain since March 2009. Yields on Treasurys dropped as money poured in.

Trading was chaotic. Investors were initially discouraged by the Fed's announcement just after 2:15 p.m. EDT, disappointed that policy makers didn't announce any new initiatives and disheartened by the Fed's gloomy appraisal of the economy. That sent the Dow down more than 200 points within minutes.

Then, just as quickly, the market rebounded as traders focused on a phrase low in the Fed's statement, which said the central bank had discussed a "range of policy tools" that it was "prepared to employ." That prompted speculation that the central bank might soon step in with additional measures aimed at spurring the economy. In the last hour of trading, the Dow shot up 500 points, closing with a gain of 429.92 points, or 4%, at 11239.77. In Asia Wednesday morning, Tokyo shares opened higher, rising 1.9% at the start of trading.

See also LAT, "Dow gains 429 after remarks from Fed."

When in doubt, parse the Fed's statements (and ignore President Barack "Steve Urkel" Obama).