Futures in Red: Fed Cuts 0.75% in Emergency Action

New York -- Wall Street is facing what could be one of the ugliest trading days since Sept.11 after global markets went into a selling panic this week. However, the Federal Reserve cut the benchmark interest rate by 0.75%, to 3.5% in an emergency action. Futures jumped sharply on the announcement, but are still down triple digits.

"The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth," the Fed said in a statement. "While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households."

The cut shows that the Federal Reserve has deep underlying concerns about the state of the U.S. economy and comes only a week before the bank's regularly scheduled meeting. The last time the bank cut this much was 1984.

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