September 21st, 2010
10:03 PM ET

Fed announcement on economic recovery causes stir

A look at the day's business headlines:

Stocks end mixed after Fed rally cools

Stocks ended the session mixed after giving up gains posted during a short-lived afternoon rally sparked by the Federal Reserve's signal that it will take any action necessary to support the recovery.

The Dow Jones industrial average finished up 7 points, or 0.1 percent. Earlier, it had added as many as 79 points.

The S&P 500 and the tech-heavy Nasdaq, which had spiked about 0.5 percent, pulled back to finish 0.3 percent lower. The S&P lost 3 points and the Nasdaq slipped 7 points.

Stocks had been drifting lower for most of the session as investors awaited news from the Fed, which left interest rates unchanged near historic lows between 0 percent and 0.25 percent, where they have been since December 2008.

But investors looking for references to quantitative easing, the central
bank's recent policy of buying bonds to stimulate the economy, cheered after the Federal Reserve said it was "prepared to provide additional accommodation if needed to support the economic recovery."

Treasury yields fall after the Fed 
 
Treasury yields fell Tuesday, extending earlier declines, after the latest policy statement from the Federal Reserve raised bets the central bank could resume more aggressive purchases of U.S. bonds and notes later this year.

The central bank said that the economic recovery has slowed and that the pace of growth is likely to be modest in the near term. As expected, the Fed held its key interest rate at a historic lows between 0 percent and 0.25 percent, where it has been for two years.

While it did not announce any additional measures to aid the economy,
some investors viewed a change in the Fed's statement as an indication that the central bank is willing to resume buying Treasurys in earnest later this year. 

The yield on the 10-year note fell to 2.58 percent from 2.72 percent late Monday. The 30-year bond yield dropped to 3.79 percent, and the yield on the 5-year note slipped to 1.31 percent. The 2-year note's yield fell to a record low of 0.43 percent. Bond prices and yields move in opposite directions.

- CNNMoney.com reporters Julianne Pepitone and Ben Rooney contributed to this report.

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Filed under: Economy
soundoff (One Response)
  1. Hines

    Just what the doctor ordered, thknatiy you!

    July 30, 2011 at 11:17 am | Report abuse |