Wall Street watches for more Fed clues

[EV_Ares]

By MADLEN READ, AP Business Writer

NEW YORK - Wall Street investors left for Labor Day weekend pleased about the prospects of an interest rate cut, but they're likely to come back wanting more evidence that rates are indeed about to come down.

The market has been in better spirits, for the most part, over the past two weeks than in midsummer, when fears that lending troubles would freeze up credit sent stocks tumbling. Although the Fed has injected cash into the banking system and lowered the discount rate — the rate it charges commercial banks for loans — Wall Street's fears haven't been completely assuaged.

Fed Chairman Ben Bernanke has not come right out and declared that a rate cut will happen, but many investors believe he has telegraphed it by saying the central bank will "act as needed." Traders who bet on the Fed's next move are not only pricing in a 100 percent chance of a quarter-point rate cut at its next meeting on Sept. 18, but also are pricing in a 100 percent chance of similar move in October.

The Fed has not reduced the benchmark fed funds rate since 2003, when it declined from a low 1.25 percent to 1 percent. Starting in 2004, the central bank made gradual rate increases until the summer of 2006, when it began holding the benchmark rate at 5.25 percent — the highest it's been since early 2001, but historically, fairly moderate.

Investors will be curious to see if the Bank of England and European Central Bank decide to lower rates Thursday. Rate cuts abroad could signal a similar move from the Fed.

LOTS OF ECONOMIC DATA ...

Friday's jobs report is probably the most anticipated of the four-day week, but there will be some notable pieces of data coming in before then.


... BUT FEW MAJOR EARNINGS REPORTS

With Wall Street between the second- and third-quarter earnings seasons, profit reports have taken a back seat to headlines about Fed policy, the economy, and loan losses.

(entire article @ link Below)

http://news.yahoo.com/s/ap/20070902/ap_on_bi_ge/wall_street_week_ahead

[Demeter]

1. A Classic Case of the Blind Leading the Blind

or the greedy leading the greedy.

[sallyseven]

2. Pure and simple;

CORPORATE WELFARE. BAILOUT STUPID INVESTMENTS.