This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stocks Advance After Fed Pledges More Stimulus

By STEVE ROTHWELL

NEW YORK (AP) â¿¿ Stocks ended the day little changed Wednesday after a rally prompted by the Federal Reserve's latest economic stimulus program fizzled out.

The Dow Jones industrial average closed down 2.99 points at 13,245.45. It had risen as much as 81 points after the Fed said earlier in the day that it would extend a bond-buying plan and keep interest extremely low.

The S&P finished 0.64 points higher at 1,428.48. The Nasdaq composite was down 8.49 points at 3,013.81.

The Fed said it will keep spending $85 billion a month on bond purchases to drive down long-term borrowing costs and stimulate economic growth. Of that amount it will spend $45 billion on long-term Treasury purchases to replace a previous bond-buying program of equal size.

The central bank also said it would keep its key short-term interest rate near zero at least until the unemployment rate drops below 6.5 percent or inflation rises to 2.5 percent. Previously, it had said that it expects to keep the rate low until at least mid-2015.

The enthusiasm over the Fed's announcement, which came at 12:30 p.m. EST, was short-lived. It briefly drew investors' attention away from the tense, high-level budget talks taking place in Washington. Also, the amount of bond buying the central bank said it would undertake was in line with what investors were expecting, Joseph Tanious, a Global Market Strategist with J.P. Morgan Funds, said.

"I don't think you're seeing markets react hugely" to the Fed, Tanious said. "Clearly what is driving markets right now is the fiscal policy. What's holding markets hostage....is uncertainty around the fiscal cliff."

In Washington, lawmakers were still trying to reach a deal to avoid the fiscal "cliff," a series of sharp tax increases and spending cuts that will hit the economy in January if Congress and President Barack Obama are unable to thrash out an agreement to reduce the U.S. budget deficit.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 17,596.35 -350.33 -1.95%
S&P 500 2,057.64 -43.85 -2.09%
NASDAQ 4,958.4680 -122.0370 -2.40%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs