The Dow Jones Industrials gained more than 400 points on the news in its largest single-day gain in five years. But other developments this week ran the bulls off Wall Street and by week's end the Dow had given back virtually all of Tuesday's rally.
According to the Commerce Department, the U.S. trade deficit grew to $58.2 billion in January. Soaring energy prices are blamed for the widening trade gap, and crude oil closed above $110 per barrel on Friday.
Due, in part, to higher prices, retail sales fell by 0.6 percent in February, far worse than the modest gain analysts had predicted.
In a positive signal, though, the Labor Department reported that its Consumer Price Index was unchanged last month.
President Bush acknowledged America's economic struggles late this week, but he also drew criticism from the environmental community for pressuring the EPA to weaken provisions of new smog regulations. Still, the Bush administration said the guidelines released this week are the "most stringent smog standards in history."
According to the Environmental Protection Agency, or EPA, there are 300 counties in the U.S. where smog levels are higher than current federal government standards. With this in mind, and prompted by provisions of the Clean Air Act, EPA officials issued a new rule this week lowering the legal limit of the main element in smog -- ozone.
After reviewing 1,700 studies on the subject, EPA ruled that the new standard would be 75 parts per billion -- down from 84 parts per billion. Agency scientists believe the reduction will cut the number of fatal heart attacks by 1,400 and reduce emergency room visits by 5,600 by 2020.
According to EPA, some of the reduction will come from new regulations in the Clean Air Interstate Rule and the Clean Diesel Program. Agency officials estimate the cost to achieve the reduction at $8.8 billion.
Objections to the new rule came from both sides of the issue. An independent advisory group assembled by the EPA believes the new levels should be 15 points lower to 60 parts per billion. And electric utilities, the oil and chemical industries and manufacturing groups are arguing the lower standards harm economic growth and are based on unproven science.
While the new guidelines are aimed primarily at densely populated, urban areas, their affect on rural America remains to be seen.