Fed Keeps Rally Alive

According to the document, economic activity expanded "a reduced pace compared with the previous survey period" in October and early November. The report noted that most retailers were expecting a slow holiday season and that a glut of available homes kept pressure on prices and construction activity.

"Demand for residential real estate remained quite depressed, with only a few tentative and scattered signs of stabilization amidst the ongoing slowdown," the beige book read. "The pace of homebuilding remained very low in general, and builders continued to shelve projects and lay off workers in many areas; contacts generally do not expect a significant pickup in homebuilding until well into next year at the earliest."

Last time out, a cash injection into Citigroup jump-started the financial sector and, in turn, the major averages. The Dow climbed 215 points, or 1.7%, to 12,958.44, and the S&P 500 added 21.01 points, or 1.5%, at 1428.23. The Nasdaq rose 39.81 points, or 1.6%, to 2580.80.

"Yesterday's technical bounce is little more than that, but it was a good start," said Marc Pado, U.S. market strategist with Cantor Fitzgerald. "The dollar managed a modest bounce. Again, it isn't a big enough move to get overly excited about, but it was a move in the right direction."

Not all the news was positive, though. Wells Fargo (WFC Quote) said after the previous close that it will take a $1.4 billion charge due to its exposure to bad loans. Still, shares rose 3% to $30.72.

Freddie Mac (FRE Quote) chimed in, saying it plans to halve its dividend and sell $6 billion of preferred stock in order to raise cash. Freddie Mac jumped 14.3% to $29.42 despite the moves.

Also on the economic front, the National Association of Realtors said existing-home sales declined 1.2% in October to a 4.97 million yearly pace, matching estimates. Inventories of unsold homes rose 1.9% to 4.45 million annualized units.

"The inventory and price data are worse than September," said Ian Shepherdson, chief economist with High Frequency Economics. "At the same time, prices appear to be collapsing. With inventory so massive, prices will keep falling."