Wall Street ended another tumultuous day with a big gain, partly recovering from its worst sell-off in years after the Federal Reserve said it was keeping interest rates steady.
The Dow Jones industrial average is ending up 141 at the 11,059 level after. On Monday, the Dow tumbled 504 points, its largest drop since the September 2001 terror attacks.
Markets around the world were still reeling from the bankruptcy filing of Lehman Brothers Holdings Inc. and the quickly assembled weekend sale of Merrill Lynch & Co. to Bank of America Corp.
Investors fear that tectonic shifts in the power structure of Wall Street signal that the financial sector's trouble with imperiled credit are far from over.
The Fed soothed fears of a worsening financial crisis even as the market waited to learn the fate of troubled insurer American International Group Inc.
The Fed signaled that while there are growing strains in the financial markets, it expects its earlier rate cuts and efforts to boost liquidity in the banking sector and help the economy.
Worries about the well-being of insurer American International Group Inc. remain, after several ratings agencies downgraded the company. Lower ratings can add to the amount of money the already cash-strapped company has to set aside. Investors are fearful that a failure by the world's largest insurer would touch off a wave of financial turmoil. AIG fell $1.67, or 35 percent, to $3.09 after being down nearly 75 percent.
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