U.S. stocks steady ahead of Fed meeting NEW YORK
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U.S. stocks steady ahead of Fed meeting
NEW YORK (MarketWatch) — U.S. stocks were little changed Monday as Wall Street adopted a cautious stance three days before the Federal Open Market Committee is expected to signal another round of bond buying. Analysts generally questioned the need for a third round of easing by the FOMC, but agreed the market is pricing the move in, with stocks hitting multi-year highs after a report Friday showed U.S. nonfarm payrolls rose by just 96,000 in August versus forecasts for a 125,000 increase.
“The only surprise the FOMC could deliver would be to not announce further bond buying,” said Art Hogan, market strategist at Lazard Capital Markets.
“I’m still in the camp of: Do we really need to? The economic data in general are better than expected, so I don’t see the pressing need for additional easing at this point,” said Paul Nolte, managing director at Dearborn Partners.
“That being said, odds are favoring [Federal Reserve Chairman Ben] Bernanke doing some sort of easing. The Fed is focused on jobs and the fact that inflation is low at this point gives them the opportunity to continue very easy monetary policy,” Nolte added.
But some analysts believe the Fed will reserve resorting to further monetary easing until later in the year, when the threatened fiscal cliff is more imminent.
The Fed is more likely to take less dramatic steps in the short term, such as extending guidance for keeping interest rates at exceptionally low levels into 2015, Hogan said. http://www.marketwatch.com/story/us-stocks-mo...2012-09-10
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