Stocks made a comeback this morning after huge slides on Friday and Monday. Traders appear to be anticipating good news from the Federal Reserve’s policy statement today.
The Nasdaq is up 3.57 percent to 2441.75 and the S&P 500 is up 2.69 percent to 1149.60, while the Dow is up 1.96 percent to 11022.22. That’s a lot of upward movement on a sliver of news, but it at least shows that greed is starting to make a comeback and fear is subsiding.
The Federal Reserve, headed by Ben Bernanke (pictured), is expected to release its policy-setting committee statement at 11:15 am PST. The question is whether the central bank still has some options to boost the economy; if it does, then the result could be positive.Speculators suggest that the Fed may have to start buying bonds again to boost the economy.
Stock indices fell 6 percent on Monday, the first full day of trading after Standard & Poor’s made a historic downgrade to the U.S. government’s credit rating.
Gold is still trading at $1,731 an ounce, a level so high that it suggests investors are still worried about more stock plunges. In tech stocks, there was a big selloff on Monday. But big companies such as Intel were up 1 percent this morning. AOL reported a profit that fell short of Wall Street’s expectations and the stock is down 17 percent, enough to trigger a temporary halt.
The volatility is taking a toll on initial public offerings. This week, there were 10 deals set to go public this week. Now a number of them have been pulled, according to the Wall Street Journal. InvenSense, a maker of gyro chips that enable devices to detect motion, postponed its IPO, as did HomeStreet and Portuguese mobile software firm Tim w.e. SGPS. While stocks are up this morning, IPOs tend to get postponed during volatile trading weeks. Of course, this does not bode well for some big IPOs that are in the works, including Groupon and Zynga.