Fed leaves key rate unchanged (AP)

kept a key interest rate unchanged Tuesday, saying that strains in financial markets have "increased significantly" but that it would keep an eye on them and act, if needed.

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Some investors had hoped the Fed would cut rates after financial markets were stunned by investment bank Lehman Brothers ' failure over the weekend to find financing or a buyer. Stocks initially slumped on the Fed announcement with the Dow Jones industrial average dropping by about 100 points. However, in late afternoon trading the Dow was up nearly 84 points as investors took heart that the central bank did not believe the economy was in as much trouble as many had feared.

Full Story: Fed leaves key rate unchanged (AP)

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