As hedge fund turmoil continues, Fed cuts rates. D.E. Shaw, Highbridge down; Goldman investor bolts

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A $3 billion equity infusion into one of several troubled Goldman Sachs quant funds did little to calm markets this week as margin calls and redemption notices at hedge funds coupled with more mortgage woes continued to take their toll.

U.S. equity markets moved closer to official correction territory Thursday before recovering late in the day, amid cries for the Federal Reserve to lower interest rates immediately. An indication of just how dire the situation is, the Fed announced an emergency half percentage point cut in the discount rate on loans to banks before markets opened Friday.

On Thursday,