Stocks Poised to Rise on Fed’s Low Rates
Markets jumped during trading yesterday, largely pushed by the news that the Federal Reserve had opted to maintain interest rate lows and would continue bolstering a pro-investment environment. The S&P 500 led the way yesterday with a 0.78 percent (8.95 points) rise, followed closely by a 0.67 percent (15.80 points) jump on the NASDAQ. The Dow Jones followed a bit further behind, but the larger composite is typically more sluggish on these one-day jumps. It still finished up 0.41 percent (43.83 points) on the day.
According to CNNMoney.com, the outlook for the rest of today looks just as bright. Markets will look to extend their gains from yesterday and set up Wall Street for an end of the week surge. The Dow Jones Industrial Average may actually reach a new 2010 peak if the morning boost continues on throughout the day.
The market optimism isn’t just a symptom seen in the United States; investors around the world seem enthused by chairman Bernanke’s decision to continue propping up financial systems with easy money. The Fed decision to extend low interest rates could have long-term negative side effects, but Bernanke and the rest of the economic leadership are much more concerned about propping up the economy today – at the risk of recreating the 2000s financial bubble.
In other news, U.S. producer prices fell in February by the largest amount in 7 months. According to , the Labor Department indicated that farm and factory product prices dropped 0.6 percent in February 2010. This was much more than most analysts expected, and a welcome relief after the 1.4 percent increase in the previous month. Analysts surveyed by Bloomberg News had projected a 0.2 percent February decline.
For the most part, declining costs have been related to stabilizing fuel prices. With so much of our fuel economy dictated by the whims of global markets and foreign production, we can hardly count on stabilized price markets in the future. Nonetheless, the drop in domestic production costs was a welcome relief to cash-strapped businesses.
PDF 
