Last week stocks were up for 416 points only to sink in the next few days. Yesterday stocks were up 420 points only to sink again today. When the Fed acts the market reacts briefly.

Stocks pulled back Wednesday as investors paused a day after the market’s huge rally and digested better-than-expected results at Morgan Stanley that eased concerns about the investment banking sector. The Dow Jones industrials fell more than 100 points.

…But some profit-taking was to be expected a day after gains that saw the Dow Jones industrials shoot up 420 points. Investors sent stocks charging higher Tuesday on stronger-than-expected investment bank results and several moves from the Federal Reserve in recent days, including a 0.75 percentage point rate cut aimed at jump-starting the credit markets.

Volatility is in. Can’t expect the Fed to lower interest rates much longer as they don’t have much further they can lower them. Then what are they going to do? Economy is in a recession, might have to ride this one out. Course with more bank failures like Bear Stearns, could head into a full fledged depression. How depressing.