Investors guess Fed’s actions, push stocks up
Monday, June 17, 2013
NEW YORK (AP) — Investors are in a game of wait-and-see with the Federal Reserve. On Monday, they guessed that the Fed will continue trying to prop up the economy, and sent stocks higher.
The major stock indexes all rose about 1 percent in early trading and stayed there for most of the day, before dipping slightly in the afternoon. The Standard & Poor’s 500 index rose 12.31 points, or 0.8 percent, to 1,639.04. It had been up as much as 20 points.
The market’s gains were broad. Telecommunications was the only one of the 10 industry sectors in the S&P 500 to post a loss.
Overall, though, there were few big company announcements or economic reports. Trading was light, the day more a holding pattern than a referendum. Investors will have to keep guessing about the Fed’s future actions until Wednesday, when it will release a statement shortly after midday.
Investors sent stocks up Monday because they think Fed policymakers will determine that the economy isn’t recovering fast enough.
That might seem like a contradiction, but a still-weak economy would influence the Fed to continue its programs designed to stimulate the economy: keeping interest rates low to encourage borrowing, and buying bonds to push investors into stocks.
In other U.S. stock trading, the Dow rose 109.67 points, or 0.7 percent, to 15,179.85. The Nasdaq composite rose 28.58, or 0.8 percent, to 3,452.13.
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