NEW YORK (Associated Press) - Shares of U.S. automakers rose Tuesday, along with the broader market, after the Federal Reserve cut a key interest rate for the first time in four years.
The Fed said that it was reducing its target for the federal funds rate, the interest that banks charge each other, from 5.25 percent to 4.75 percent. The half-point reduction was double the quarter-point move that many economists had been expecting.
The move was designed to boost economic growth by lowering borrowing costs for millions of consumers and businesses.
Last month's decline in jobs and weakening retail sales coupled with a weakening housing sector, tightened credit markets and stock market volatility all gave investors hope that the Fed would make the move.