The following is an excerpt from Kate Gibson | January 25, 2012 | Marketwatch.com |
S&P 500 has closed up 12 out of 15 sessions so far this year
NEW YORK (MarketWatch) — U.S. stocks erased losses to turn higher Wednesday after the Federal Reserve said it would keep interest rates near zero until at least late 2014, extending its previous pledge by more than a year.
The Fed’s decision “should provide a boost to growth. In theory, lower interest rates can boost mortgage refinancing, lift equity prices, and increase business investment while supporting vehicle and home sales,” noted Ryan Sweet, a senior economist at Moody’s Analytics. Read more on Fed statement.
After falling as much as 95 points, the Dow Jones Industrial Average DJIA +0.77% was lately up 49.91 points at 12,725.13, with 23 of its 30 components rising.
“The equity market loves the stimulus, but if the Fed’s view is true, than I would think that equities, especially in the near term, will come crashing down to earth. If the Fed has missed the call, then today might offer some of the best value in the stock market in quite some time,” offered Kevin Giddis, a fixed-income analyst at Morgan Keegan. Read text of FOMC statement.
Boeing Co. BA +0.85% was among those reversing course, with the aerospace manufacturer shedding losses that came on its weaker-than-expected 2012 earnings forecast.
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