Katie Allen and Graeme Wearden guardian.co.uk, Tuesday January 22 2008
A massive emergency cut in US interest rates was not enough to avoid fresh carnage on Wall Street this afternoon.
The US Federal Reserve had earlier stunned the markets with its 75 basis point cut to 3.5%, reacting to growing fears of a recession in the world's largest economy.
However it did not prevent a rush of selling when Wall Street opened an hour later. The Dow Jones industrial average plunged more than 400 points within minutes of the opening bell, and was down almost 4% at 11,679.
The FTSE continued its volatile ride today, and was up around 17 points, or 0.3%, at 5,595 after US trading began. Yesterday it plunged 5.5%, the biggest fall since 9/11.
The interest rate cut, which came ahead of the Fed's scheduled meeting next week, is the biggest in more than two decades and follows steep stock m