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U.S. Fed slashes rates 75 basis points in rare inter-meeting intervention

U.S. Federal Reserve Board chairman Ben Bernanke apparently heard investors' prayers.

In the strongest intervention between scheduled rate cuts since 2001, the U.S. central bank has slashed its benchmark overnight lending rate by three-quarters of a percentage point to 3.5 per cent , in a desperate attempt to slow or stop the slide in the U.S. economy that has triggered a global stock market meltdown.

The move reversed a sharp slide in U.S. stock index futures, although they are still pointing to red ink at the opening bell.

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There was speculation in Europe earlier today that Mr. Bernanke might take such action, although many North American commentators have been pooh-poohing the idea the Fed would act before its next scheduled rate setting meeting.

There has also been some talk of the Bank of Canada, which is set to release its latest rate decision at 9 a.m. (EST) today, may cut by 50 basis points, rather than the standard 25 basis points.

The March futures contract on the Dow Jones industrial average shot up 11,950, still down 156 points but up from its overnight low of 11,456, while the S&P 500 contract recovered to 1,282.1, off 43.2 points, up from a low of 1,255.3.

The March contract on the Nasdaq 100, meanwhile, shot back to 1,797.75, down 51.75 points, having earlier hit a low of 1,744.5.

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