Investors buy modestly, await word of Fed
NEW YORK — It's all about the Fed. Still.
Stocks moved higher on Tuesday, helped by news of a pickup in home building and low inflation. But the Federal Reserve loomed large, with investors trying to guess what the central bank will say on Wednesday about how long it plans to keep stimulus programs in place. For many, the market was in a holding pattern as investors waited for the announcement.
The market's gains were steady and broad. The Standard & Poor's 500 index rose 12.77 points, or 0.8 percent, to 1,651.81. All 10 of its sectors rose, led by industrial and telecommunications companies. The Russell 2000, an index of smaller companies, closed at a high just shy of the 1,000-point milestone.
The Dow Jones industrial average rose 138.38 points, or 0.9 percent, to 15,318.23. The Nasdaq composite index rose 30.05 points, or 0.9 percent, to 3,482.18.
The day's wait-and-see vibe came from a familiar template. The Fed has had an outsized effect on the stock market in recent weeks, with the major indexes getting yanked back and forth as investors try to guess how long the central bank will keep supporting the economy.
Some investors say it's troubling that the market is relying more on the central bank for direction than on economic fundamentals. The latest turning point was May 22, when Fed Chairman Ben Bernanke startled markets by announcing that the central bank could soon pull back on its bond-buying program if the economy improves.
“Here we are again,” said Gregg Fisher, founder and chief investment officer of Gerstein Fisher, a financial advisory firm in New York. “We don't know what the actions will be. We're all trying to figure that out.”
The Commerce Department reported that the pace of home building increased in May, helped by more buyers coming to the market and a scarcity of houses for sale. Investors described the report as good enough to send the market up, but not good enough for the Fed to think the economy is healthy enough to abruptly slash its stimulus efforts.
The Labor Department reported that consumer prices rose last month, but only slightly. That's likely to influence the Fed's decisions. The Fed knows that its stimulus programs can lead to inflation. If inflation is in check, however, that gives the Fed more leeway to continue the programs.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Clean Air Council challenges Sunoco Pipeline’s public utility status
- Stocks, oil prices regain ground after steep 6-day sell-off
- Marcellus shale drillers, Pa. settle 3 cases of fouling water supplies, pay $374K
- BNY Mellon works to overcome computer glitch in investment calculations
- Oilfield giant Schlumberger to purchase Cameron in $12.71B deal
- Dish and Sinclair agree in principle on new contract
- S.W. Randall Toyes & Giftes of Pittsburgh’s owner finds joy in toys
- Market strategists predict churning, but no major slump
- Busy Beaver Home Improvement Centers join True Value co-op
- Roundup: Kraft Heinz recalls more than 2M pounds of turkey bacon; 2 key Mylan shareholders won’t participate in Perrigo vote; more
- Teens scale down back-to-school shopping, forcing retailers to adjust sales strategies