USA: Wall Street climbs at open even as investors keep a wary eye on an upcoming statement from the U.S. Federal Reserve

Record ID: 186904

  • Title: USA: Wall Street climbs at open even as investors keep a wary eye on an upcoming statement from the U.S. Federal Reserve
  • Date: 10th August 2011
  • Summary: NEW YORK CITY, NEW YORK, UNITED STATES (AUGUST 9, 2011) (ORIGINALLY 4:3) (REUTERS) NYSE BOARD SHOWING THE DOW JONES INDUSTRIAL AVERAGE TURN TO 10,917.85
  • Embargoed: 25th August 2011 13:00
  • Keywords:
  • Location: Usa, Usa
  • Country: USA
  • Topics: Economy
  • Reuters ID: LVABMTZQ6G73Q0IA7A2GNMNC5022
  • Story Text: U.S. stocks rose more than 1 percent on Tuesday (August 9) after the previous session's nosedive, but markets could reverse if investors are not convinced the Federal Reserve has a plan to combat the meltdown linked to fears of a new recession.
    After opening higher, stocks almost immediately lost gains, with the Dow briefly turning negative. However, they then bounced off those lows and returned solidly positive.
    Equities suffered a massive decline on Monday (August 8), the first session since the United States lost it top-tier credit rating, with the S&P posting its worst one-day loss since December 2008 and nearing bear market territory. Volume was the heaviest since the "flash crash" in May 2010.
    The Dow Jones industrial average was up 156.48 points, or 1.45 percent, at 10,966.33. The Standard & Poor's 500 Index was up 19.89 points, or 1.78 percent, at 1,139.35. The Nasdaq Composite Index was up 50.05 points, or 2.12 percent, at 2,407.74.
    Federal Reserve policymakers began meeting Tuesday morning, and a Fed statement is due at 2:15 p.m EDT. While the central bank isn't expected to debut any new program to help asset prices, selling could re-emerge if there's no indication that help is on the way.
    The CBOE Volatility index fell 13.8 percent, but was still up more than 60 percent so far this month. Standard & Poor's downgrade of the U.S. credit rating late Friday, removing the nation's triple-A designation for the first time in history, sparked the decline and underlined fears a recession was inevitable given increasing signs of slowing growth and more turmoil in the euro zone.
    According to a Reuters poll, the U.S. faces one-in-four odds of slipping back into recession, though the economic outlook is raising the likelihood of new Fed action. Even though fear remained a dominant emotion in the markets, analysts said stocks could be nearing a bottom. They noted the S&P was now more technically oversold than at any other time in the last ten years, with its 14-day relative strength index was at 16.5 percent. Generally a level below 20 attracts buyers. Bank of America Corp, the S&P's biggest decliner on Monday, climbed nearly 7 percent to $6.96 (USD).
  • Copyright Holder: REUTERS
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