NEW YORK (AP) Wall Street tottered in search of a direction today as more credit problems emerged, raising investors’ anxiety about what the Federal Reserve might do next to steady the markets and the economy.
Stocks moved slightly higher in volatile trading after Senate Banking Committee Chairman Christopher J. Dodd said Fed Chairman Ben S. Bernanke isn’t satisfied with Wall Street’s response to the central bank’s efforts to stabilize the markets. Mr. Dodd, after a meeting with Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr., said policy-makers plan to use “all tools available” to complete its mission.
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 central bank’s discount rate to banks.
However, many on Wall Street want the Fed to do more, including lowering the more important federal funds rate, and to do it soon. Any moves by the Fed to come back into the market were seen as positives by Wall Street traders in light of continued jitters.
Speculation grew today that troubled Countrywide Financial Corp. might be a takeover target because of losses linked to distressed subprime mortgages. Investors also expected more layoffs after Capital One Financial Corp. said it was shuttering its GreenPoint Mortgage unit and slashing 1,900 jobs.
“There are two camps out there, one that thinks we need a rate cut, and the other doesn’t feel the economy has slowed enough to warrant one,” said Janna Sampson, director of portfolio management at Oakbrook Investments. “I think which camp leads on each day, or even each hour, is what is leading to all this volatility. There’s just too much uncertainty.”
In late morning trading, the Dow Jones Industrial Average rose 15 points, or 0.11 percent, to 13,136, having moved in and out of positive territory.
Broader stock indicators were slightly higher. The Standard & Poor’s 500 Index was up five points, or 0.36 percent, at 1,451, and the Nasdaq Composite Index rose nine, or 0.36 percent, to 2,518. The Russell 2000 Index of smaller companies added three, or 0.36 percent, to 790.
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