Stocks higher in Fed afterglow


Stocks are climbing again today after the Federal Reserve surprised investors by keeping monetary stimulus in place.

S&P 500 futures are up about 0.25 percent, while Europe is up about 1 percent. Most Asian bourses rallied about 2 percent in the overnight session.

The Fed's decision yesterday not to taper monetary stimulus drove interest rates lower and triggered a buying frenzy in stocks and commodities. The dollar fell across the board, boosting a recent trend of capital into foreign assets such as emerging markets.

The news potentially marks a return to the period between 2004 and 2007, when the global growth outpaced the domestic economy. While the U.S. has shown signs of improvement for most of the year, employment has lagged. Inflation and recent economic surveys have also given central bankers reason to keep interest rates low.

Numbers from Europe and China have been improving at the same time, while the Australian dollar--a key indicator of global growth--has been rebounding from a three-year low.

Housing stocks, which spent most of 2013 consolidating in a range after a big rally last year, also rallied because the Fed's move will keep mortgage rates down. The industry could be active in the near term because several key reports are scheduled for next week. (See related calendar story )

Price action remains mostly bullish in the foreign-exchange and commodity markets. The euro is up slightly against the U.S. dollar while the Japanese yen is down across the board. Oil is indicated to climb another half a percent, while copper rose more than 1 percent. Gold and silver are pausing after their big moves yesterday and agricultural foodstuffs are up across the board.

In company-specific news, Oracle is down about 1 percent after reporting weaker-than-expected quarterly revenue last night. Agilent Technology is rallying more than 10 percent on news it will split into two companies. Rite Aid is exploding higher by 13 percent on a strong earnings report as well. Pier 1 is down after missing analysts' forecasts.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Copyright © 2010 OptionMonster® Holdings, Inc. All Rights Reserved.

This article appears in: Investing , Options

Referenced Stocks: SPX



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