Wall Street received a much needed pick-me-up after Federal Reserve Chairman Ben Bernanke said today that additional stimulus could be in the works if the market and economy needs it. While many economists and analysts believed that the Fed would continue to help stimulate economic activity, many debated on whether a third round of quantitative easing would actually happen. The Dow Jones Industrial Average, S&P 500 and NASDAQ are all up over 1 percent on the news. The Fed had stated before that it believes the current “soft patch” in the U.S. economy would pass, but is prepared to act if conditions continued to deteriorate. The Fed’s easy money policies since the start of the recession has been credited to holding up the stock market, keeping stocks as an attractive investment for investors. Wall Street also got a boost as China said its economy had grew more than expected in the second quarter. With the U.S. job market stalling, inflationary pressure in the economy should ease, while Bernanke added that deflation could be a concern down the road. Oil prices also moved higher to over $98 a barrel as U.S. supplies dropped more than expected. Gold moved up by over 1 percent on the stimulus news.
Major U.S. Stock Indices
DJIA: 12,573.50 (+1.02 percent)
S&P 500: 1,327.39 (+1.02 percent)
NASDAQ: 2,816.57 (+1.25 percent)
Russell 2000: 842.83 (+1.57 percent)
In other news:
- With Europe’s financial crisis potentially spreading like a virus, banks are tightening up their positions to prepare for the worse. [WSJ]
- Gold is back to making new highs, but can this bull market for the precious metal last? [Marketwatch]
- July hasn’t been too kind to Rupert Murdoch. News Corp. (NWSA) backs off on his BSkyB takeover bid. Murdoch’s family still owns about 39 percent of the British satellite TV company. [NY Times]
- Interesting move by Netflix (NFLX), changing up their pricing structure for customers right when Hulu is trying to become a legitimate competitor to its video streaming business. [Fortune]
- GE (GE) CEO Jeff Immelt on how jobs can come back to America. [CNBC]
Check back for more news.