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In: Business and Management

Submitted By dlioliver
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Bumpy Ride for Stocks Post-Fed

By JONATHAN CHENG

Stocks bounced in and out of positive territory and the dollar and the 10-year Treasury note fell after the Federal Reserve said it would buy $600 billion in longer-term securities by the middle of next year as part of its latest effort to prime the domestic economy.
The Dow Jones Industrial Average was down 11 points, or 0.1%, to 11178, while the Standard & Poor's 500-stock index fell less than one point to 1193 and the Nasdaq Composite fell less than one point to 2533.
[pic]Getty Images
A financial professional looks over at his screen on the floor of the New York Stock Exchange in the middle of the trading day Nov. 3.
The 10-year Treasury note sank, pushing the yield up to 2.634%. Gold and metals also fell as the Fed said it would maintain its existing policy of reinvesting principal payments from its securities holdings, and purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011 at a pace of about $75 billion a month.
The Fed said it would also "regularly review the pace of its securities purchases and the overall size of the asset-purchase program" as economic data flows in.
Expectations of Fed easing had helped fuel a two-month surge on the stock market that has added 12% to the Dow.
The Fed move was generally in line with market estimates, putting to rest the idea that the central bank would proceed on a more cautious step-by-step basis from the get-go.
Anthony Chan, chief economist at J.P. Morgan Private Wealth Management, said that tepid approach was now "off the table." Mr. Chan said the Fed's approach would help with "taking the uncertainty out of the air."
Keith Springer, president of Capital Financial Advisory Services, said the Fed delivered "the bare minimum" of what the market would accept, but warned that there was a gloomy message in...

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