Fed Leaves Rates On Hold

The Federal Reserve kept US interest rates son hold Tuesday, despite pressures from shaky financial markets and a financial tsunami on Wall Street.

The U.S. central bank's decision leaves the interbank overnight federal funds rate at 2 percent, where it has been since April.

Markets retreated after the Fed announced its decision at mid-afternoon.

Finally, after a volatile session which saw the Dow swing from a 174-point drop to a 100-point rally and back again, the Dow Jones Industrial Average settled up 86.39, or 0.8 percent, to 11,003.9.

Stocks eventually settled higher on speculation that the Federal Reserve will step in to rescue American International Group Inc. from collapse.