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30 Jan, 2008 17:04

U.S. housing woes mount

The Dow Jones and Nasdaq indexes went up around half a percent after the Federal Reserve reduced the key benchmark rate for the second time in a week. The move was aimed at boosting the U.S. economy. However, the experts' worries have been only increasing

The decision takes place against the release of 4th quarter GDP results showing that the world's largest economy slowed more than expected between October and December registering growth of just 0.6 per cent.

The commerce department data showed the economy slowing dramatically from 4.9 per cent in the preceding quarter. The figure makes for an annual growth rate of 2.2 per cent – the lowest growth in the U.S. since 2002.

The gloomy data pushed the Federal Reserve for a second reduction, which was widely expected. Last week it came with an emergency move to reduce the rate by 75 basis points. The benchmark rate now stands at 3 per cent.