NEW YORK (CNNMoney.com) -- Stocks recouped earlier losses, with the Dow moving into poisitive territory, after the Federal Reserve said it was 'prepared' to provide to take action to support the recovery, if needed.
The Dow Jones industrial average (INDU) gained 37 points, or 0.3%. The tech-heavy Nasdaq (COMP) and the S&P 500 (SPX) also recovered from earlier losses but hovered around the breakeven point.
Stocks had been drifting lower for most of the session as investors awaited news from the Fed, which left interest rates unchanged.
Stocks had closed at their highest levels since mid-May on Monday as the S&P 500 index crossed technical levels after a key group of economists called an official end to the recession.
Fed holds rates: The Federal Reserve kept its benchmark interest rate at historic lows between 0% and 0.25%, where rates have been since December 2008.
But, as has been the case for nearly two years, investors focused on the outlook and looked for references to quantitative easing, the central bank's recent policy of buying bonds to stimulate the economy.
The Fed said recovery has "slowed" in recent months, but that it is "prepared to provide additional accommodation if needed to support the economic recovery."
That marks the first time the Fed has used quantitative easing type language, heartening investors.
At its previous meeting, the Federal Reserve was cautious about the recovery, saying it plans to reinvest its debt into longer-term Treasury securities.
Economy. The government released one of several readings on the housing market due this week.
Housing starts hit a four-month high, surging 10.5% to an annual rate of 598,000, the Commerce Department said. Economists were expecting the annual rate to rise by a modest 1.7%, according to consensus estimates from Briefing.com.
But investors shrugged off the better-than-expected news.
"Despite the positive report, it's clear that it will take a long time for housing market to really produce a sustainable recovery," Sheldon said.
Building permits also rose, edging up 1.8% to an annual rate of 569,000.
Companies: Hewlett-Packard said late Monday that it has settled its lawsuit against Mark Hurd, the company's ousted CEO, after the tech giant claimed he breached his separation agreement by taking a job at rival Oracle.
Hurd resigned from HP (HPQ, Fortune 500) in August after he was cleared of sexual harassment charges but accused of violating the company's code of ethics. Shares of HP edged lower in early trading.
World markets: European closed mixed. Britain's FTSE 100 0.1% lower, while the CAC 40 in France rose 0.2% and Germany's DAX gained 0.1%.
In Asia, the Hang Seng index in Hong Kong and Shanghai Composite finished the session slightly higher. Japan's Nikkei index fell about 0.3%.
Currencies and commodities: The dollar fell against the euro and the Japanese yen and was up slightly against the British pound.
The expiring October oil futures contract fell $1.06 to $73.80 a barrel. Oil futures for November delivery, which will be the active contract beginning Wednesday, fell 40 cents to $75.79 a barrel.
Gold for December delivery fell $7.60 to $1,273.20 an ounce. Gold continues to break records, settling at a record-high close at $1,280.80 an ounce on Monday.
Bonds: The yield on the benchmark 10-year note fell to 2.68% from 2.72% late Monday as prices moved higher. Treasury prices and yields move in opposite directions.
No comments:
Post a Comment