The Federal Reserve announced that it will begin buying Treasuries to help open up tight credit markets. The central bank plans to purchase up to $300 billion of longer-term Treasury securities over the next six months. Upon announcement of the decision, both government bonds and bank stocks soared.
Quincy Krosby, who helps manage $298 billion as chief investment strategist at the Hartford in Hartford, Connecticut, commented, â€œThe Fed is all in and theyâ€™re going to do whatever it takes to kick-start the economy. Itâ€™s good for stocks because the more the economy picks up the more companies profits and revenues will pick up.â€
In mid-afternoon trading, the Dow Jones industrial average rose 122.90, or 1.66 percent, to 7,518.60. The Standard & Poor’s 500 index added 19.50, or 2.51 percent, to 797.62, and the Nasdaq composite index rose 35.96, or 2.46 percent, to 1,498.07. Since the market rally began last week, the Dow has jumped 13 percent, and the S&P 500 has soared 15 percent.