Prices paid or bid to the producer f.o.b. elevator as of 4 p.m.; grain sorghum quoted per hundredweight: wheat, corn and soybeans per bushel.

WASHINGTON — The worst financial crisis in 70 years has forced the Federal Reserve to employ all the weapons in its arsenal — including cutting interest rates to near historic lows — to try to keep the country from plunging into a deep recession.

Fed policymakers are expected to slash a key interest rate by a half-point, pushing the federal funds rate down to 1 percent, as they wrap up a two-day meeting today.

That would put the Fed’s target for the interest banks charge each other on overnight loans down at a level last seen during the 12-month period between June 2003 and June 2004. Before that period, the funds rate had not been that low in 45 years, since Dwight Eisenhower was president.

Economists believe the Fed is prepared to cut rates that low because of the rising fears that the financial turmoil of the past two months is raising the specter of a deep and prolonged recession.

“The Fed is going to send a very strong signal that they will do whatever it takes to restore stability to the economy,” predicted Mark Zandi, chief economist at Moody’s Economy.com.

for more go to http://www.chron.com/disp/story.mpl/business/6083462.html

NEW YORK — U.S. stocks headed for a rebound today as investors awaited the start of a two-day meeting of the Federal Reserve that is widely expected to bring another reduction in interest rates.

The sharp rise in stock market futures contracts today was to be expected given the extreme volatility that has been the hallmark of Wall Street’s behavior for more than a month. At the same time, the sometimes light volume of futures trading can make it difficult to determine the market’s overall mood. In recent weeks, stock futures have moved solidly in one direction, while actual trading was more moderate after the opening bell.

Still, a rebound appeared likely early today after the Dow Jones industrials fell more than 200 points Monday on worries about the economy, giving the blue chips a loss of more than 500 over two sessions. A worldwide rally after huge losses Monday likely helped sentiment early today.

Dow Jones industrial average futures rose 336, or 4.19 percent, to 8,347. Standard & Poor’s 500 index futures gained 37.00, or 4.43 percent, to 871.70, while Nasdaq 100 index futures rose 51.50, or 4.43 percent, to 1,213.50.

Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose 3.78 percent from 3.69 percent late Monday. The yield on the three-month Treasury bill, regarded as the safest investment around and an indicator of investor sentiment, rose to 0.84 percent from 0.77 percent Monday. A higher yield indicates a dip in demand.

WASHINGTON — Former Federal Reserve Chairman Alan Greenspan told Congress in prepared testimony today that the current global financial crisis is a ‘once in a century credit tsunami’ that policymakers did not anticipate.

Greenspan was to be the leadoff witness at a House hearing lawmakers called to question past key financial players about what they felt caused the most grave financial crisis since the 1930s. The witnesses were also expected to be asked how they thought the government would deliver the nation from the economic turmoil.

Greenspan was the chairman of the Federal Reserve for 18½ years. In testimony prepared for the House Government Oversight and Reform Committee, he voiced shock over the present turn of events and called conditions deplorable.

Meanwhile, new claims for jobless benefits increased by more than expected last week as companies cut jobs due to the slow economy, the Labor Department said today.

NEW YORK — Banks trust each other a bit more now than they did two weeks ago. That doesn’t mean that they and other investors are taking on more risk, though.

Eight straight days of drops in bank-to-bank lending rates are helping money flow through the short-term credit markets a bit more smoothly. But stocks are dropping again and Treasury bills remain in high demand, two signs that loans are going to be hard to come by for some time.

“Things are stabilizing, but this doesn’t mean we have rosy days ahead,” said Axel Merk, portfolio manager at Merk Funds.

Many companies over the past week have said they are cutting back spending, building up reserves, and shifting their financing methods as loans become scarcer and more expensive.

Today, packaging maker Silgan Holdings Inc. lowered its 2008 earnings-per-share forecast due to increased borrowing costs. On Tuesday, natural gas and oil explorer Bill Barrett Corp. raised its line of credit with JPMorgan Chase & Co. to $592.8 million from $467 million based after drawing down $174 million from its previous facility, while aerospace products maker Hexcel Corp. said it was cautiously monitoring its spending due to the credit environment.