Dow Climbs 400 Points As Market Closes Following Fed Statement
- Posted on August 9, 2011 at 4:06pm by
Billy Hallowell
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NEW YORK (The Blaze/AP) — The Federal Reserve spoke – and financial markets swung wildly before rallying. The Dow rose more than 400 points as markets closed. CNNMoney.com provides the following graph of the day’s market action:
But stocks first sank after the Fed said that economic growth this year has been “considerably slower” than it expected and that it will keep interest rates near their record low of almost zero until at least the middle of 2013. But then they shot back up.
The 10-year Treasury note rose sharply within minutes, sending its yield down to 2.10 percent, a low for the year. It had reached a low of 2.34 percent on Monday. A bond’s yield drops when its price rises. Gold, considered a safe haven when other investments are tumultuous, rose again to $1,773.60 per ounce, up from its $1,713.20 closing price on Monday.
The Fed said that it expects “a somewhat slower pace of recovery over coming quarters.” It also said that temporary factors, such as the high price of gasoline this spring and Japan’s March earthquake and tsunami, were only part of the reason for the weaker economy.
The Fed statement didn’t give investors any new information, said Peter Coleman, head of equity research at investment bank JMP Securities. He said investors might have liked to hear something more positive “but the data, with the exception of one okay jobs report, has been pretty consistently negative the last few weeks.”
“The market is already pricing in” low rates for the long term, said Alan Ruskin, an analyst with Deutsche Bank. He said reassurance that rates would stay low until mid-2013 was unlikely to provide much of a boost in the near term.
In late afternoon trading, the S&P 500 was up 2.3 percent, or 26 points, to 1,144.
The Dow Jones industrial average rose 196 points, or 1.8 percent, to 11,003. That follows its worst day since 2008. On Monday the Dow plunged 634.76 points on the first day of trading since Standard & Poor’s cut the U.S. credit rating from AAA to AA+.
The Nasdaq composite index rose 60 points, or 2.6 percent, to 2,418.
Boosting the stock market isn‘t one of the Fed’s jobs, but that hasn’t stopped investors from parsing every word of the statements made by the Fed and its chairman, Ben Bernanke.
The Fed’s mandate is to keep prices stable and promote low unemployment, not boost stocks. But a stock dive after Fed comments has happened before. On June 3, the stock market suffered a late-day dive when Bernanke spoke in public at a conference. Investors said they were looking for a hint of new plans to spur economic growth. When that didn’t come, all three major indexes sank.
After Bernanke outlined the plan for a second round of quantitative easing in August 2010, the S&P 500 index gained 28 percent over eight months. Investors pointed to that rebound as evidence that quantitative easing worked – and so did Bernanke. This sentiment led some people to believe that if stocks fall too far, the Fed would come to the rescue.
Economists now believe there is a greater chance of a U.S. recession because the economy grew much more slowly in the first half of 2011 than previously thought. The economy grew at its slowest pace in the first half of 2011 since the recession ended in June 2009.
The manufacturing and services industries barely grew in July. The unemployment rate remains above 9 percent, despite 154,000 jobs added in the private sector in July.
Economies across the globe are also struggling.
Worries are growing that Spain or Italy could become the next European country to be unable to repay its debt. Another concern: high inflation in less-developed countries, which have been the world’s main economic engine through the recovery. China’s inflation rose to a 37-month high in July.
Concerns about the global economy have pulled attention away from stronger corporate earnings this spring.
Dish Network Corp.’s second-quarter net income rose 30 percent to $334.8 million on stronger revenue.
The housing market, though, remains weak. Homebuilder Beazer Homes USA Inc. said its loss widened last quarter after it closed on fewer homes.
Among the 441 companies in the S&P 500 index that have already reported their second-quarter earnings, profits are up 12 percent from a year ago.
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Jaycen
Posted on August 10, 2011 at 1:15pmArtificial manipulation of interest rates must stop!
The market should set interest rates, just like it did before the Federal Reserve started manipulating it. Central Planning doesn’t work. One man, even Alan Greenspan, can’t predict all human motivation. One entity cannot control the entire economy.
Clearly, it gets away from them and runs amok. Let the market do what the market does. It always stabilizes itself. The swings and dips have only gotten worse and more pronounced since they tried to “control it”.
Interest rates need to go up, desperately, to encourage savings and investment.
Report Post »gmoneytx
Posted on August 10, 2011 at 11:25amYep and now it’s down more than 400 points today, can you say roller coaster. Hope there is a trash can nearby, when I get off this ride I’m gonna puke!
Report Post »NuffSaid
Posted on August 9, 2011 at 10:12pmBernancke and the Internationalist, including George Zorros, are going to try every trick in the book to artificially keep the DOW numbers up. Its a fraud, just like the Obama-Mao administration. Bernanke is no friend of the American people.
This interest freeze is a lie and it will be revealed qithin 7 days. Not even Bernanke, the little crack baby, can know what interest rates will do in the next week. Another lie by the liars some a** elected.
Report Post »OneFunR6
Posted on August 9, 2011 at 10:48pmUmm, actually he can know, in that as Chairman of the Fed, he w/others set the interbank or ‘prime’ interest rate.
He cannot, however, control the US bond resale markets, meaning that their prices and yields are set by the market, ie the buyers and sellers
Report Post »Praise God Almighty
Posted on August 9, 2011 at 8:45pm1.) No government agency can overrule the decisions made by the Federal Reserve.
2) Along with US government appointed board of governors, the Federal Reserve consists of 12 private corporations called Federal Reserve Banks.
3) Federal Reserve shareholder names are a highly safeguarded secret. In fact, they are protected by law because the shares can’t be sold or traded. No one is allowed to know who they are and no one can find out. This includes the President of the United States.
4) When money is injected into the economy, it is created out of thin air and compounded interest (debt) is charged to the US government for each dollar bill created.
5.) The interest (debt) is profit for the owners and shareholders of the Federal Reserve and the global banksters behind the curtain.
6) The system is called usury on fiat money. It is a system of perpetual debt in that new money is always being injected into the economy, with debt attached. There is no way to ever get out of debt. It is a scam.
7) Canada uses usury on fiat money. We pay $160 million per day in taxes to the banksters.
8) All political parties in all the western democracies support usury on fiat money.
9) The mainstream media will not make usury on fiat money public knowledge.
10) The governments have the legal authority to create their own non-debt currency. Instead they choose to saddle their populations with debt for the benefit of corporatism.
For more information: http://www.youtube.com/watch?
Report Post »WeMustNeverForget
Posted on August 9, 2011 at 8:22pmI think we just got QE3 in the form of lower interest rates. What did prior QE’s do? Keep the interest rates low. Now, today we get the announcement that the interest rates are to remain low on through mid 2013?? I’d say we just got QE3 and possibly QE4 alright, but it’s not being called QE3.
What do you folks think?
Report Post »OneFunR6
Posted on August 9, 2011 at 10:52pmNot quite the same thing,…
QE IS the actual ‘printing’ of more money….
which ‘they’ will do more of…….. and more of and more of and more of……..
to keep U.S. ALL in debt and more importantly………..
TO REMAIN IN POWER.
IT WILL FAIL.
Report Post »hempstead1944
Posted on August 9, 2011 at 7:42pmDon’t get too comfortable…..Lucy is holding the football and Charlie Brown is about to be fooled one more time…..
Report Post »John 1776
Posted on August 9, 2011 at 7:47pmSomething’s really wrong here, 7:45 pm and gold is up to $1762. Usually, when the market spikes, gold drops back (the so-called reverse on “flight to safety”.)
Investors want to get back in, but this looks like a trap.
Report Post »Encinon
Posted on August 9, 2011 at 6:57pmToday’s rebound is a direct reflection of the fact that the markets want Obama to have at least another 4 years as president. He has done brilliant work at warding off an economic collapse. He saved or created countless wealth as without his policies the DJA would have fallen to zero this week.
Report Post »Levinite
Posted on August 9, 2011 at 7:12pmAre you being sarcastic or just crazy?
Report Post »OneFunR6
Posted on August 9, 2011 at 10:45pmjust crazy!
Report Post »Marengo Ohio Patriot
Posted on August 9, 2011 at 6:02pmpeople,,, the government ain’t broke! it still has plenty of paper and a lot of green ink! relax, and keep watching your t.v.’s……….
Report Post »Uncurable wound
Posted on August 9, 2011 at 5:45pmRIGGED!!!
Report Post »Our whole economy is built on a throne of lies.
get ready people-its starting to hit the fan…
louise
Posted on August 9, 2011 at 5:52pmRush Limbaugh said yesterday that he would not be surprised if this happened today.
Report Post »It does seem to be rigged, doesn’t it?
SpankDaMonkey
Posted on August 9, 2011 at 5:38pm.
Report Post »We so screwed the market don’t know what to do…………
OneFunR6
Posted on August 9, 2011 at 10:53pmtime to …………………..
SpankDaMonkey! Rof!
Report Post »Whostolemypig
Posted on August 9, 2011 at 5:33pmIf Obama came out and announced his retirement the stock market would really take off.
Report Post »Dont-hate-on-me-2
Posted on August 9, 2011 at 9:32pmtake off is an understatment. I think it would launch into orbit on a trip to Mars.
Report Post »NILAP
Posted on August 9, 2011 at 5:32pmThe calm leadership of President Obama reassures Wall Street. This President is unbelievably talented!
Report Post »pantera2
Posted on August 9, 2011 at 5:41pmSorry – but you don’t have a clue about what you are talking about.
Report Post »Encinon
Posted on August 9, 2011 at 6:54pmI agree. The President has done a great, great job. His goal should be to keep unemployment rate between 9 and 10 percent. Also, the stock market is the republicans fault. He inherited the wild swings of the past week from Bush and change can’t be expected to come “tomorrow”. After this last week, I have move him up to number one on my list of all time best presidents
Report Post »tonydanibradbury
Posted on August 9, 2011 at 5:11pm“What? I’m not an addict! I can quit any time I want!” How many more hits before our economy flatlines?????
Report Post »Miami Bob
Posted on August 9, 2011 at 5:08pmThe market rebounded in one day!! Ya sure. I see Timmy Boy and Obama know how to put the fix in when needed to cover their tracks.. Theses guys are on a mission and they will not let anybody or anything stop them.. Something has to give sooner or later and its not going to be pretty.
Report Post »wes14451
Posted on August 9, 2011 at 5:19pmIf Bush and Paulson would have left market alone we would have already bottomed out, corrected and been humming til Obama started spending but then this would absolutely be his recession
Report Post »goobert
Posted on August 9, 2011 at 4:54pm2 years is = qe3 + qe4
Report Post »The Eradicator
Posted on August 9, 2011 at 5:07pmBut the Fed said no QE3 today…I’m sure…they…will..stick…(ahem) to that.
???
Report Post »WeMustNeverForget
Posted on August 9, 2011 at 8:18pm@Goobert… You are so right!! We just got QE3 in the form of lower interest rates. What did prior QE’s do? Keep the interest rates low. Now, today we get the announcement that the interest rates are to remain low on through mid 2013?? I’d say we just got QE3 and possibly QE4 alright!
Report Post »The Eradicator
Posted on August 9, 2011 at 4:54pm400 Points Up!!!…Again, all is fixed. Nothing to see here, go back to your jobs, lives, etc. Obama and the admin has once again solved the problem. Happy days are here again!
Report Post »tonydanibradbury
Posted on August 9, 2011 at 5:12pmYayyy!!!!!! Now little girl Obama can go ride her bike again!!!
Report Post »tonydanibradbury
Posted on August 9, 2011 at 5:14pmYayyyy!!!! Now little girl Obama can go ride her bike again!!!
Report Post »cloudsofwar
Posted on August 9, 2011 at 4:47pmthe rollercoaster continues to roll. buy if you want to ride. strickly a long term ride unless you are g. soros or buffet.
Report Post »Skee
Posted on August 9, 2011 at 4:40pmPraise Lord Obama. His magic Keynesian pixi dust rescued the Dow.
Report Post »cloudsofwar
Posted on August 9, 2011 at 4:50pmObama Obama give us a country that makes your wife proud……………
Report Post »DeliverUsFromEvil
Posted on August 9, 2011 at 4:55pmCan we ixnay with the “Quantitative Masturbation” and get some sound fiscal policy and a sane regulatory environment? Then, and only then, will we witness the capacity of the American people to get this country moving again.
Report Post »OneFunR6
Posted on August 9, 2011 at 11:23pmOnly AFTER the FED Gov. destroys itself by spending and printing.
Then and ONLY then, after ALL governments are GONE,…. LOCAL, State AND Federal,..
Report Post »can WE rebuild.
Psychosis
Posted on August 9, 2011 at 4:37pmman when the market really crashes this will look like a party
here is a link that explains what is actually heading our way, and it aint pretty
http://www.americanthinker.com/2011/08/the_keynesian_fraud.html
Report Post »SimpleTruths
Posted on August 9, 2011 at 4:42pmRight, and wasn’t the world going to end in Spring this year too?
Report Post »thegrassroots
Posted on August 9, 2011 at 4:36pmImho, America’s Recovery Will Begin When:
#1 – All involved are firmly convinced that BHO and minions are as good as fired and will be replaced with A Good, Conservative, We The American People Administration in 2012.
#2 – All involved are convinced that until 2012 Congress will keep BHO‘s feet to the fire and refuse to fund anymore of his BHO and minions spend binge and begin taking steps to defund BHO’s existing spend binge.
#3 – All involved need to be firmly convinced that America knows BHO and his minions are the source of the problems and that America will deal with BHO and his minions as quickly and efficiently and effectively as possible.
Report Post »Anonymous T. Irrelevant
Posted on August 9, 2011 at 5:03pmThat’s because all of the UNCERTAINTY that Obama has caused during his whole presidency.
Report Post »The stock market thrives on speculation and if Wall Street thinks it knows where it is headed, then markets do okay, but if it sits in the dark, not knowing what is going to happen day by day, it will just ride the current.
Dont-hate-on-me-2
Posted on August 9, 2011 at 9:38pmthats right bud, The market can not be micro managed by the goverment, it will do what its doing now. However if you lay down a plan and let the economy get back to work it will launch into orbit
Report Post »wscitgo
Posted on August 9, 2011 at 4:25pmWant to hear something absolutely incredible. The left wing progressives over at CNBC who cheerlead the markets on a minute by minute basis were all in tears yesterday and last night about the market sell off and do what they always do—BLAME THE SHORT SELLERS—you know, the only group of people that know how to read a balance sheet and income statement and know how corrupt our financial system is. Anyway, these cheerleading crybabies at CNBC were all crying that leverage ETFS caused the market meltdown (that is, if they were not blaming S&P), and were all talking about how short selling and leverage short ETFs should be banned.
How much do you want to bet that today’s market rally was short sellers being squeezed? I also bet you anything that there will not be one peep from the lying crybabies at CNBC about how leverage works both ways. You see, when the market goes down, they always want to blame, but when it goes, they don’t care why it went, because they just want the market to “go up”.
The cheerleading, ignorant lying criminals (and crybabies) at CNBC are so intellectually dishonest that they cannot even report the truth even when it is in their favor. If one is to take the position that the market went down due to leverage, certainly that same idea would cause the markets to go up as it did today. Even many people in the mainstream are so intellectually dishonest they do the same thing—when the market goes down due to leverage, they are quick to b
Report Post »cloudsofwar
Posted on August 9, 2011 at 4:42pmGE owns CNBC. what else is there to say.
Report Post »hauschild
Posted on August 9, 2011 at 4:17pmHow can anybody in their right minds put money into something that is so blatantly fixed??? Essentially, what investors did today was buy stocks because the Fed told us all that we don’t have to face reality for a few more years. I mean, it’s crazy. How much longer can the charade last???
How can a guy invest knowing the market is not going up because of concrete reasons, but because the puppet master is pulling a few strings??? I sit here in amazement because an increasing market is supposed to be an indication of a thriving economy, is it not?
Report Post »Gonzo
Posted on August 9, 2011 at 4:38pmWhat are the options if you have a 401K? Cash in, take 10% off the top for early withdrawal and then pay taxes on it? You just have to hang on and pray the new (2013) president will start an economic expansion like Reagan did. I wish like heck I had cashed out in ‘08 and bought gold but, hindsight is 20/20.
Report Post »SimpleTruths
Posted on August 9, 2011 at 4:50pm@GONZO
Report Post »Read a real history book instead of Conservapedia. Reagan expanded the GOVERNMENT workforce by 3X while growing those living below the poverty level nearly 30%. Reagan ran on a platform of a balanced budget but grew the deficit by 2 TRILLION. Reagan lined the pockets of his already rich contributors and defense contractors by spending a TRILLION dollars on a doomed STAR WARS system that every reputable scientist or engineer (that wasn’t on the dole) KNEW could not work – and didn’t work and was scrapped with virtually nothing to show for the money. Reagan – give me a break.
Gonzo
Posted on August 9, 2011 at 5:04pmReagan started the greatest and longest-lasting peacetime economic expansion in U.S. history. Ask your boy Clinton, he enjoyed the bounty that Reagan provided.
Report Post »circleDwagons
Posted on August 9, 2011 at 6:27pmwhat else are you going to do with it? Money that is. if you hold, it looses value. buy gold? at 17+
Report Post »spend it, buy beer
OneFunR6
Posted on August 9, 2011 at 8:08pmhauschild, you are right.
“How can anybody in their right minds put money into something that is so blatantly fixed??? ”
I stopped doing just that.
Gonzo – “What are the options if you have a 401K? Cash in, take 10% off the top for early withdrawal and then pay taxes on it?”
YES! Better to PAY 24% TAXES NOW, than to PAY 100% LATER.
I now have 76% of ALL of my 401k’s IN GOLD, IN MY HANDS.
“I wish like heck I had cashed out in ‘08 and bought gold but, hindsight is 20/20.”
DO IT RIGHT NOW!!!!!!!!!!!!!!!!!
I have a simple question for little Timmy, little Benny and the Dumbocrat in Chief, that I‘m quite sure they CAN’T ANSWER.
What’s the ONLY REAL difference between a One dollar bill and a One Hundred dollar bill?
TWO ZEROS.
And the difference between one ounce of GOLD and one hundred ounces of GOLD?
NINTY-NINE OUNCES of GOLD!
Report Post »hauschild
Posted on August 9, 2011 at 8:38pmI moved my 401k from an indexed fund to a stable value fund a few weeks ago. I certainly am not earning much, but I won’t lose anything either.
This is really crazy. There‘s simply no way I can purchase stocks when the market rises 400 points because the fed is going to spend more money we don’t have. People – how crazy are things when what happened today with the Fed is actually considered big, positive news? I don’t want any part of it. I think the days of sticking your money into an indexed fund and letting ‘er ride are long gone. I think you can make money in stocks today, but you have to actively and probably daily manage your portfolio which is certainly a far cry from one indexed fund. Or, have some flunky manage it? No thanks. Too many slackers out there.
Thought about gold and am still mulling it and I realize keeping it in a fund that earns about 2% will barely keep up with inflation. It’s so different than it used to be. I really don‘t see things breaking back to the 1980’s model unless we get a Palin-type of POTUS next go around. Somebody that realizes the fixes are so simple, they’re sickening. We can‘t continue down this path of no growth and slackers and then believe the stock market will go back up and we’ll be back to 2005 returns simply because as the self-proclaimed experts say, “That‘s the way it’s always been in America, so it’s only a matter of time.” 4get the fact 40% of Americans are socialists, and the entire landsc
Report Post »John 1776
Posted on August 9, 2011 at 4:16pmClosed up over 400 …. and the can rolls further down the road….
Report Post »Goodgriefgeezlouise
Posted on August 9, 2011 at 4:15pmStimulus then tarp..Debt through the roof and now the Fed says they will keep rates low for two years..Artificial?..Real?..Time will tell..If they are trying to provide stability through 2012 so that Obama might look a bit better then it’s understandable..If they are doing this and know that the results might be that the US economy will be so stressed that the only solution might be a Global currency and economic governing body, then that might also be understandable..I think they all underestimate the resolve of the American people. I expect to see all of these knuckleheads gone next year..keep the faith!
Report Post »sWampy
Posted on August 9, 2011 at 4:12pmDead Cat Bounce?
Report Post »vennoye
Posted on August 9, 2011 at 4:23pmMight as well be………may be. House of cards!! 300 points on Helicopter Ben’s statement..Priceless
Report Post »biohazard23
Posted on August 9, 2011 at 4:29pmObama speaks, Dow takes a nose dive. Mickey Mouse speaks, it picks back up. Hell, at this point, I think the market would rebound if Larry Flint were to say a little something about the state of the economy. I mean, does ANYBODY have confidence of the n.utless wonder-in-chief??
Report Post »Juan Gault
Posted on August 9, 2011 at 7:25pmPlunge Protection Team,in action,perhaps? Created to prevent confidence in times of financial trama.
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