Fed holds rates, calms markets; Dow gains 153 on Cisco earnings

CBS

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[Music] stocks took off ignited by strong earnings news from Cisco Systems and some sweet talk from the Federal Reserve on Tuesday the FED left interest rates unchanged and said the credit crunch should not hurt economic growth the Dow raced ahead 153 points while the NASDAQ rocketed 51 finally some good news to report on the housing front mortgage applications Rose for the first time in 3 weeks as interest rates fell and the National Association of Realtors says while it does expect home sales to continue to slow this year home prices will drop far less than originally expected General Motors is shaving its sales forecast for this year because of the weaker housing market and higher gas prices Toyota and Ford have also recently trimmed their sales forecasts and a new Airline joined the crowded Skies today Virgin America took off from New York to San Francisco and Los Angeles it is the brainchild of billionaire Richard Branson who already owns Virgin Atlantic amenities include massage seats in first class and the ability to text message other passengers that's your money watch for the latest business headlines log on to cbsnews.com in New York I'm Alexis christofer

Dow tanks 387 as BNP Paribas freezes subprime funds

CBS News

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investors are strapped in for the final Wall Street ride of the week we'll see if the bargain hunters make an appearance or if the Bears will scare them away on Thursday more signs that the credit crunch is spreading had investors running for the exits the blue chips suffered their biggest percentage drop in over three years on the biggest trading volume of the year the Dow Industrials tanked 387 points the Nasdaq plummeted 56 the sell-off was triggered overseas when Frances biggest bank BNP Paribas said it was freezing three funds with exposure to the subprime mortgage market here in the US adding more fuel to the fire AIG the world's largest insurer said more homeowners are falling behind on their mortgage payments even those with good credit proof that the mortgage mess is spreading meantime financing the American Dream is a bit cheaper this week Freddie Mac says the average rate on a 30-year fixed-rate loan dropped to six point fifty nine percent that's down from six point six eight percent last week and just slightly above last year's level the average rate for 15 year loan fell to six and a quarter percent and good news for prospective car buyers looking to buy American the latest JD Power and Associates vehicle dependability survey has Buick tied with Lexus for the highest ranking it's the first time in 12 years at lexus is sharing the spotlight in the study it measures problems with vehicles in the first three years of ownership cadillac mercury and honda round out the top five performers that's your money watch keep an eye on the markets by logging on to cbsnews.com