Financial stocks failed to gain ground after the Federal Open Market Committee lowered both the federal funds rate and the discount rate by 50 basis points, to 5.5% and 5%, respectively.

The American Banker index of the top 50 banks ended down 0.8%, and its index of 225 banks lost 0.88%. The especially interest rate sensitive thrifts also sold on the news, sending the American Banker thrift index down 2.21%. The Nasdaq composite index and the Standard & Poor's 500 index also lost 2.31% and 0.56%, respectively.

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