On Wall Street, stock prices rose on Monday, recovering some of last week’s losses, as investors believe that the U.S. Fed will continue to pursue a very loose monetary policy to stimulate economic recovery.
The Dow Jones strengthened by 109 points, or 0.73 percent, to 15,179 points, while the S&P 500 rose by 0.76 percent to 1,639 points, and the Nasdaq index increased by 0.83 percent to 3,452 points.
From the very beginning of yesterday’s trading, the indices were in the positive, at times exceeding 1 percent, recovering last week’s losses, as investors believe that the Fed will continue to maintain a loose monetary policy.
However, the Financial Times reports that the U.S. central bank may signal a forthcoming start to tapering its stimulus monetary programs.
On Wednesday, the Fed will release a statement from its two-day meeting, and immediately after that, the central bank’s president Ben Bernanke will hold a press conference.
“We have become hostages ahead of the decision on stimulus measures, and the market is always uncertain before the announcement of such important news,” says Dan Veru, director at Palisade Capital Management.
As part of the so-called quantitative easing monetary policy, introduced four years ago, the Fed injects cheap money into financial markets by purchasing government and mortgage-backed securities worth $85 billion per month, in order to keep long-term interest rates low, stimulate lending, and promote economic growth.
