Wall Street Wavers on Credit News

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Wall Street Hesitant As Investors Look for Fed to Cut Rates on Further Credit Worries

Wall Street moved lower Tuesday as more credit problems emerged, raising investors' anxiety
about what the Federal Reserve might do next to steady the markets and the economy.

Speculation grew that troubled Countrywide Financial Corp. might be a takeover target due to
losses linked to distressed subprime mortgages. And, investors expected more layoffs after
Capital One Financial Corp. said it was shuttering its GreenPoint Mortgage unit and slashing 1,900 jobs.

Wall Street remains worried that a broadening credit crisis triggered by distressed subprime loans will curtail borrowing to the point where it hurts companies across the economy. The Fed has
taken a number of steps to prop up the nation's financial institutions, including injecting more
liquidity into the banking industry and cutting the discount rate.

But many on Wall Street want the Fed to do more, including lowering the more important federal funds rate, and to do it soon.  And that could be a
topic of discussion when Fed Chairman Ben Bernanke and Treasury
Secretary Henry Paulson meet Tuesday with Senate Banking Committee
Chairman Christopher Dodd to discuss the market's recent turbulence.

Bonds continued to rally, with the yield on the benchmark 10-year Treasury note at 4.58
percent from 4.63 percent late Monday. Investors have bailed out of stocks due to recent
volatility, and moved swiftly into safer investments like Treasurys.

The dollar was mixed against other major currencies, while gold prices rose.

Oil prices edged up 18 cents to $71.30 on the New York Mercantile Exchange. Investors have
been wary as Hurricane Dean picks up pace toward Mexico, where major oil companies like
state-run Pemex Oil have already battened down oil rigs in the Gulf of Mexico.

With no major economic reports scheduled, investors are expected to pore over a number of
earnings reports from retailers to gauge the health of consumer spending.