The results of the Federal Reserve's latest policy meeting caused some fluctuation in the major U.S. equity indices but there wasn't a dramatic reaction to the news that the central bank was leaving its interest rate target intact. The Fed also tweaked the language of its policy statement and adjusted some of its economic projection.
Chairman Ben Bernanke combated that perception to some extent in his press conference though, once again leaving the door for more quantitative easing ever so slightly ajar during the question-and-answer session.
"Bernanke went out of his way at least four times to say that QE3 is still on the table, so I think we can take from all of this that QE3 is still on the table," said John Canally, strategist at LPL Financial. "And that's not by mistake, [Bernanke] is prepped ad nauseum for this thing so he didn't say that for no reason."The Dow Jones Industrial Average advanced 89 points, or 0.7%, to close at 13,091, not far off the session's high of 13,105. The S&P 500 rose 19 points, or 1.4%, to finish at 1391. The Nasdaq soared 68 points, or 2.3%, to settle at 3030, thanks largely to Apple's outstanding quarterly earnings report as the company sold more than 35 million iPhones, far exceeding consensus expectations. The Fed dominated the afternoon headlines though. The central bank raised its GDP forecast for 2012 to a growth range of 2.4-to-2.9% from a prior projection of 2.2-to-2.7%. It also gave a more optimistic outlook for the jobs market, estimating the unemployment rate moving down to 7.8-8% this year from the expectation of 8-8.2% it gave in January, and boosted its inflation outlook slightly, going to an increase of 1.9-2% from a range of 1.4-1.8%. There was a more hawkish tone to the proceedings as seven members of the Fed's rate-setting arm now expect a tightening of interest rates in 2014, up from five in January but this adjustment was offset by Bernanke's comments about providing more monetary stimulus if necessary.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV