Wall Street swallowed something it didn't know how to digest today -- in increase in Chinese interest rates.
Oil prices plunged after the announcement that China is boosting rates for the first time in nine years and stock prices initially followed oil lower.
But while oil stayed down -- dropping $1.54 a barrel to $50.92 at the close of regular trading on the New York Mercantile Exchange -- stock prices rebounded from their initial losses and closed little changed from yesterday.
The Dow Jones industrial average gained two-and-a-half points to 10,004.54, the Standard & Poor's 500 stock index picked up two points, closing at 1,127.44, and the Nasdaq Stock Market composite index climbed almost six points to 1,975.74.
The rate cut is expected to slow the growth of China's economy, which is growing so fast that China has now become the world's second largest user of oil -- after the United States. China's consumption is one of the principal reasons that oil prices have gone to record levels in the past month.
While reducing demand for oil in China ought to ease the pressure on prices, the impact of higher interest rates on other investments and the world economy is less clear. Some economists argue that slowing China's economic growth ought to benefit the United States in more ways than just bringing down oil prices.