Federal Reserve, Stock Market | featured news

The Federal Reserve says it may start dialing back asset purchases this summer, but Wall Street doesn't seem worried Wednesday with stocks flying Wednesday and driving the major averages to fresh nominal highs.

To quell the latest financial crisis, the Federal Reserve smashed interest rates to the floor by buying bonds with money it effectively prints. Since 2008 assets on the Fed’s balance sheet, including those bonds, have tripled, to $3 trillion. (Hey, people needed encouragement, and low rates are encouraging.) The mixed results: Entrepreneurs and homeowners got some relief, while savers got whacked along with the value of the U.S. dollar. Starving for yield, investors piled into stocks, pushing the Dow Jones Industrial Average to its all-time high, absent inflation.

Billionaire investor Warren Buffett says stock prices have gotten a boost from low interest rates caused by the Federal Reserve's stimulus efforts.

Stocks rose Wednesday, as investors watched Fed Chief Bernanke deliver the semi-annual "Monetary Policy Report to the Congress" before the House Financial Services Committee.

Investors appeared unimpressed Wednesday with the Federal Reserve's latest step to help the economy, an extension of a program to lower long-term interest rates. Stocks were little changed for the day, and the yields on Treasury bonds were trading about where they were before the Fed's announcement.

Wall Street took a drubbing Wednesday as investors worried that the Federal Reserve might not be willing to pump more money into the U.S. economy.

Stocks tumbled on Thursday, extending losses for a fourth straight session, as the Federal Reserve's weak outlook for the U.S. economy and disappointing data from China heightened fears about a global recession.

Bottom Line: Stocks rose in mid-morning trade on Wall Street Tuesday as investors grew more optimistic that the Federal Reserve would announce new moves to stimulate the economy.

Stocks resumed their downward slide in early trading Wednesday as investors retreated from the initial optimism that greeted the Federal Reserve's decision the day before to keep interest rates low.

The Fed spoke - and financial markets rallied. The Dow Jones industrial average surged more than 429 points, its tenth highest point gain in history and the biggest since March 2009. It was just one day after the Dow had its worst point decline since 2008.