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THE MINEFIELD

The Fed's move continues a string of steps from the U.S. central bank to tip-toe through the credit-crisis minefield, defusing bombs along the way.

"The Fed has gained some important 'street cred' over the past two weeks with its latest salvo on rate cuts and credit facilities designed to stave off financial and economic Armageddon," said Scott Anderson, senior economist at Wells Fargo Economics in Minneapolis.

On Monday, helped by news of the Bear deal, some of the safe-haven protection taken recently against downside risk in the U.S. economy was being removed.

The benchmark 10-year Treasury note yield traded back above 3.55 percent, the highest since March 13, and dealers cut back on the potential for further big cuts to the Fed's benchmark lending rates this year. Major equities indexes rose more than 1.8 percent.

"I don't know if the rot has ended, but for now, in the short-run, there seems to be more stability," said Wyss.

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