Stocks rose on Tuesday even after minutes from the Federal Reserve's Dec. 16 meeting showed that policy makers remained deeply concerned economic conditions, expressing the view that output would contract in 2009, unemployment would rise "significantly" into 2010 and that inflation could flirt with "uncomfortably low levels."
The minutes alluded to concerns regarding the overall effectiveness in using an expansion of the balance sheet as a way to mitigate the downturn. While some members expressed the view "that quantitative targets for an increasing reserve base could be effective in preventing deflationary dynamics," other members were concerned that "increases in excess reserves or the monetary base, by themselves, might not have a significant stimulative effect on the economy or prices because the normal bank intermediation mechanism appeared to be impaired..."
At the close of floor trading on the NYSE, the DOW was on 9015.10 after gaining 62.21 points (0.69%). The S&P was on 934.70, up 7.25 points (0.78%) while the NASDAQ had moved to 1652.38 with a gain of 24.35 points (1.50%). Bonds were mixed again on Tuesday, with traders selling the shorter end of the yield curve and buying the long. Yield on the 2-year note rose 1.5 basis points to 0.787% while yield on the benchmark 10-year note fell 1.3 basis points to 2.460%. The dollar was mixed after falling ahead of the Fed minutes, with gains of 0.83% on the euro and 0.27% on the yen but with losses of 1.56% to the pound and 0.81% against Australia's currency.
Crude oil for February delivery was recently trading down 38 cents (-0.78%) to $48.43 per barrel.
Gold for February delivery was recently trading up $7.80 (0.91%) to $865.00 per ounce.
Crude oil for February delivery was recently trading down 38 cents (-0.78%) to $48.43 per barrel.
Gold for February delivery was recently trading up $7.80 (0.91%) to $865.00 per ounce.