The US Federal Reserve’s extraordinary intervention in the credit markets that began almost two years ago is likely to continue – at least in the near future. 

Yesterday, at the end of the two-day meeting of the Federal Open Market Committee, the Fed repeated its commitment to keep interest rates “exceptionally low" for an “extended period" while admitting the economic recovery remains fragile.  However, stocks lost ground after starting the day higher as concern mounted low interest rates would stoke inflation.  The Dow Jones industrial average slipped further from its 14-month peak reached Monday.  

The FOMC statement noted, "Household spending appears to be expanding at a moderate rate, though it remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit." And while deterioration in jobs formation is "abating," companies remain "reluctant to add to payrolls," and continue "cutting back on fixed investment."

Nevertheless,

The US Federal Reserve’s extraordinary intervention in the credit markets that began almost two years ago is likely to continue – at least in the near future. 

Yesterday, at the end of the two-day meeting of the Federal Open Market Committee, the Fed repeated its commitment to keep interest rates “exceptionally low" for an “extended period" while admitting the economic recovery remains fragile.  However, stocks lost ground after starting the day higher as concern mounted low interest rates would stoke inflation.  The Dow Jones industrial average slipped further from its 14-month peak reached Monday.  

The FOMC statement noted, "Household spending appears to be expanding at a moderate rate, though it remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit." And while deterioration in jobs formation is "abating," companies remain "reluctant to add to payrolls," and continue "cutting back on fixed investment."

Nevertheless,

Abu Dhabi’s bailout of a Dubai World unit and a big acquisition by Exxon Mobil sent stocks higher Monday, as investors grew confident the economy is on a positive path.  Investors were particularly pleased after the Middle Eastern city-state of Abu Dhabi came forward with a $10 billion financing to save cash-starved Dubai from plunging into a deeper crisis. 

Back home, activity on the mergers and acquisitions front gained momentum as Exxon Mobil (NYSE:XOM) announced that it will buy XTO Energy (NYSE:XTO) in a $31 billion all-stock deal.  Exxon shares failed to advance on the announcement and retreated 4.3%.  Financials rose after Citigroup (NYSE:C) said it struck a deal with the government to pay back $20 billion in bailout money.  Nevertheless, sentiment was cautious, as it has been for weeks.    

This morning's premarket futures suggest a lower opening on the Wall Street as the Federal Reserve begins a two-day

US stocks rose for a second day on Wednesday as a decline in October trade deficit and signs of revival in the job market boosted confidence that an economic recovery is indeed underway.  Although the Labor Department said weekly jobless claims rose more than expected, the average number of Americans filing for jobless benefits fell to a one-year low.  Retail and consumer stocks gained, encouraged by the jobs report.      Stocks also got a fillip after a separate report showed October trade deficit declined 7.6% to $32.9 billion, as a weak dollar helped boost US exports.  Exports grew a healthy 2.6%, while imports increased only 0.4%.  Although trading remained thin, gains were broad based, with 24 of 30 Dow stocks recording gains, led by commodities and consumer-related companies.  Those ending the day in the green included Alcoa (NYSE:AA), Chevron (NYSE:CVX), Walt Disney (NYSE:DIS), Johnson & Johnson (NYSE:JNJ) and

US stocks rose for a second day on Wednesday as a decline in October trade deficit and signs of revival in the job market boosted confidence that an economic recovery is indeed underway.  Although the Labor Department said weekly jobless claims rose more than expected, the average number of Americans filing for jobless benefits fell to a one-year low.  Retail and consumer stocks gained, encouraged by the jobs report.      Stocks also got a fillip after a separate report showed October trade deficit declined 7.6% to $32.9 billion, as a weak dollar helped boost US exports.  Exports grew a healthy 2.6%, while imports increased only 0.4%.  Although trading remained thin, gains were broad based, with 24 of 30 Dow stocks recording gains, led by commodities and consumer-related companies.  Those ending the day in the green included Alcoa (NYSE:AA), Chevron (NYSE:CVX), Walt Disney (NYSE:DIS), Johnson & Johnson (NYSE:JNJ) and

A rising dollar and falling oil and gold prices made investors jittery yesterday, sending the Dow Jones industrial average tumbling more than 100 points.  Fitch's downgrade of Greece's credit rating, a $3.65 billion first half loss at Dubai World's Nakheel, and a 1.8% October drop in German industrial output also weighed on sentiments.

The US dollar rose to one-month high against the euro, rising 0.9% to 76.21 against a basket of foreign currencies.  Meanwhile, US Treasuries also lured investors, with the price on the 10-year gaining 11/32, and the corresponding yield dropping to 3.39%.  Gold prices continued their downward journey, falling 1.8% to $1142.80.

The Dow Jones industrial average tumbled 104 points, or 1%. The broader S&P 500 index lost 11 points, or 1%. The Nasdaq composite retreated 17 points, or 0.8%.  Market breadth was negative. On the New York Stock Exchange, declining issues beat those that advanced two-to-one

A rising dollar and falling oil and gold prices made investors jittery yesterday, sending the Dow Jones industrial average tumbling more than 100 points.  Fitch's downgrade of Greece's credit rating, a $3.65 billion first half loss at Dubai World's Nakheel, and a 1.8% October drop in German industrial output also weighed on sentiments.

The US dollar rose to one-month high against the euro, rising 0.9% to 76.21 against a basket of foreign currencies.  Meanwhile, US Treasuries also lured investors, with the price on the 10-year gaining 11/32, and the corresponding yield dropping to 3.39%.  Gold prices continued their downward journey, falling 1.8% to $1142.80.

The Dow Jones industrial average tumbled 104 points, or 1%. The broader S&P 500 index lost 11 points, or 1%. The Nasdaq composite retreated 17 points, or 0.8%.  Market breadth was negative. On the New York Stock Exchange, declining issues beat those that advanced two-to-one

U.S. stocks closed broadly higher Monday, ending a three-day losing run, as a strong housing report reassured investors’ faith in the economy.  A weak dollar helped lift gold to another record high and sent shares of commodity-related companies higher.  Calls for central banks around the world to continue stimulus measures also hurt the dollar even as speculation grew that the Federal Reserve will keep interest rates at a record low.

On Monday, the 30-stock Dow Jones industrial average surged 132.79 points, or 1.29%, to 10,450.95.  The broad Standard & Poor's 500-stock index rose 14.86 points, or 1.36%, at 1,106.24 and the tech-heavy Nasdaq composite index jumped 29.97 points, or 1.40%, to 2,176.01. Trading volume was light, with NYSE volume less than 1 billion shares, as advancing shares outran decliners by a four-to-one margin.  Wall Street’s fear gauge, the CBOE Vix, plummeted 4.6% to 21.16.

Treasuries lost ground as investors’

U.S. stocks closed modestly lower Wednesday, after paring deeper losses, as weak housing data and grim outlook from tech companies fuelled worries about the economy.  Stocks struggled to stay near the 13-month high reached the prior session as jittery investors decided to book profits.  Gold prices rose for the fourth straight session.

The Dow, which had slid as much as 77 points in the morning trading, closed down 11.11 points, or 0.1%, to 10,426.31.  The broader S&P 500 index slipped 0.52, or 0.1%, to 1,109.80, while the Nasdaq, hurt by the weakness in tech shares, fell 10.64, or 0.5%, to 2,193.14.  Bond prices fell, pushing yields higher. The yield on the benchmark 10-year Treasury note rose to 3.37% from 3.33% late Tuesday.  Crude prices advanced 44 cents to settle at $79.58 per barrel.  Volume remained light, with only 1.063 billion shares trading on the NYSE, and declining issues ahead

U.S. stocks rose strongly Thursday, reversing a four-session losing run, after a government report said the economy grew more than expected in the July-September quarter.  Investors shunned Treasuries and jumped back into stocks after the report signaled the economy had emerged from the worst recession since the 1930s. 

The positive surprise was enough to propel benchmark indexes to their biggest advance since July and send safe havens like Treasuries and dollar lower.  Caterpillar Inc. (NYSE:CAT) and Alcoa Inc. (NYSE:AA) advanced at least 5.1% after the Commerce Department said the economy returned to growth following four straight quarters of decline.  Crude prices jumped $2.44, or 3.1%, to $79.87 and gold was up $16.50 to $1046.40.

The S&P 500 registered its biggest one-day gain since July 23, jumping 2.2% to close at 1,066.11.  The 30-share Dow Jones industrial average shot up by 199.89 points, or 2.05%, at 9,962.58 and the tech-heavy