After looking into the abyss on Monday, traders appear to have decided life is worth living. Even before the Federal Reserve open markets committee spoke, stocks staged a big global rally.

Lehman Brothers, the focus of recent concern, recovered from exaggerated rumours of its demise. At midday in New York, its stock was up 120 per cent from the low it hit on Monday afternoon. The fear that Bear Stearns would be the first of a series of dominoes, with more investment banks to fall, has been vanquished for now.