CNBC's Steve Liesman joins Andrea Mitchell Reports to recap the meeting.
By NBC News wire services
Updated at 3:00 p.m. ET: Stocks shot higher Thursday, as traders reacted to the Federal Reserve?s decision to launch further stimulus measures to boost the economy.
In a statement released at the close of a two-day meeting, the Federal Reserve announced a third round of unconventional monetary stimulus, saying it would expand its holdings of mortgage-backed securities and signaling that a weak economy may warrant ultra-low interest rates until at least mid-2015, extending a forecast it made in January by about six months.
?If the outlook for the labor market does not improve substantially, the committee will continue its purchase of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability,? the Fed said in a statement.
The Dow Jones industrial average was up about 10 points ahead of the Fed?s mid-day announcement. It tacked on around 70 points shortly after the Fed?s statement was released. It was lately up over 230 points, hitting levels not seen since December 2007.
The broader S&P 500 index rose to its highest intraday level since January 2008 and the Nasdaq climbed 1 percent.
Stock prices soared and the dollar weakened as investors bet that the Fed?s fresh phase of monetary stimulus would support economic growth.
As part of a new round of quantitative easing, the Fed said it would buy $40 billion of mortgage debt per month to keep borrowing rates low, starting on Friday.
The Fed gave the market "what it wanted," said James Meyer, chief investment officer at Tower Bridge Advisers in West Conshohocken, Penn.
However, the Fed offered a fairly sober view of the state of the economy during a press conference following the Fed?s announcement, saying that while the economy has shown signs of progress, employment continues to lag. Bernanke said the job market has to improve before the Fed will scale back its economic stimulus.
?The weak job market should concern every American,? Bernanke said.
With the S&P 500 index up more than 9 percent since the start of June on expectations global central banks will act to combat slowing growth, some analysts are wondering how much further the index can climb.
Wall Street ended little changed on Wednesday, erasing early gains in cautious trading.
In other economic news, more Americans than expected filed for jobless benefits in the latest week, with at least a portion of the increase due to the effects of Tropical Storm Isaac, the government reported.
Earlier, European shares dipped, edging back further from the 14-month high hit in the previous session, with some saying action from the U.S. Federal Reserve is needed to provide further support to prices.
Britain's BAE Systems and Airbus-owner EADS said they are in advanced talks to create an industry giant that would overtake rival Boeing in sales and contend with defense cutbacks in Europe and the United States.
Asian shares slipped slightly in choppy trade ahead of the Fed decision, with investors cautiously optimistic of further stimulus action to bolster the world's largest economy.
Reuters contributed to this report.
More money and business news:
Follow NBCNews.com business on Twitter and Facebook
notorious big biggie smalls lyrics azores emmylou harris disco inferno b.i.g 1000 words
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.