Follow Us:
Wednesday, August 17, 2022

Stocks advance as investors await Fed rate cut

Wall Street advanced Tuesday as the Federal Reserve opened a two-day...

By: AP | New York |
January 29, 2008 11:45:26 pm

Wall Street advanced Tuesday as the Federal Reserve opened a two-day meeting expected to result in another interest rate cut to revitalise the struggling US economy.

The Fed’s imminent rate decision is clearly the market’s focus this week, and trading is marked by investors’ conjectures about policymakers’ thoughts on the weak economy and crunched financial industry. With a decision not expected until Wednesday afternoon, the market in the meantime digested Tuesday’s data on earnings, consumer spending and durable goods. Investors did get some encouragement about the economy after the Commerce Department said orders for big-ticket items rose 5.2 percent in December, the widest jump in five months. In addition, the Conference Board reported consumer confidence fell in January — pretty much as expected. Economic data will continue to be scrutinised as investors try to determine what the psyche of the Federal Reserve is regarding the economy. Investors are angling for a half-point cut following its emergency three-quarter-point cut last week. “The market is just in a holding pattern,” said Todd Leone, managing director of equity trading at Cowen & Co. “It seems we’ve hit a short-term bottom, and the market has been stabilising as we wait to hear what the Fed says.”

In late morning trading, the Dow Jones industrial average rose 69.42, or 0.56 percent, to 12,453.31. Government bond prices fell as stocks rose. The dollar was mixed against most major currencies, and gold prices fell. Oil prices moved higher as traders waited to see what the Fed’s next move will be. Wall Street being extremely volatile in recent weeks amid fears of a U.S. recession and further write-downs in the financial sector. However, that has given way to a more quiet tone this week as investors looked for their second-straight day of gains before the Fed’s decision.

Central bankers are expected to lower key rate, now at 3.5 per cent, by as much as one-half percentage point to 3 per cent when policy-makers end the meeting. This will be the last meeting for two months, but that doesn’t rule out another emergency cut for the time being.

Subscriber Only Stories
Delhi Police in RTI reply: 80% match in facial recognition is deemed posi...Premium
Ratan Tata backed start-up to empower senior citizensPremium
Explained: The Bilkis case remissionsPremium
Power, a reality checkPremium

In the meantime, Fed auctioned $30 billion in funds to commercial banks on Tuesday — the fourth time since last month it has provided banks with extra reserves.

The auction is designed to keep banks lending and prevent a severe credit squeeze from pushing the country into a recession. Investors were also hopeful after President Bush’s State of the Union address Monday night. Bush urged Congress, as expected, to expedite its approval of a $150 billion tax relief and business incentive package. As American Express Co’s fourth-quarter results indicated Monday, companies are being forced to prepare for deteriorating credit and slower spending.

📣 Join our Telegram channel (The Indian Express) for the latest news and updates

For all the latest News Archive News, download Indian Express App.

  • Newsguard
  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
  • Newsguard
First published on: 29-01-2008 at 11:45:26 pm

Featured Stories