Last updated: June 22. 2013 1:02AM - 412 Views
By - jsylvester@civitasmedia.com - (570) 991-6110

Story Tools:

Font Size:

Social Media:

Traders have decided that the stock market has suffered enough, at least for now.

After a two-day plunge, the market is ending the week with an advance Friday, suggesting that perhaps Wall Street will be successfully weaned from the Federal Reserve’s easy money after all.

“Saner heads are prevailing,” said Jim Dunigan, chief investment officer at PNC Wealth Management. “People are looking a little deeper into the message from the Fed — the economy is getting better,” he said. “At the end of the day that’s a positive.”

Investors had known that sooner or later the Fed would quit spending $85 billion per month pumping money into the U.S. economy.

That money has been a big driver behind the stock market’s bull run the last four years. It led to low interest rates that encouraged borrowing for everything from factory machinery to commercial airplanes to home renovations. Has the economy been great? No. Unemployment is still high and U.S. growth has been anemic. But it could have been worse. Investors were confident enough in a growing economy that U.S. stocks hit all-time highs in the past month.

Then on Wednesday, the Fed said it would aim to turn off that spigot next year as long as the economy is strong enough.

Just because investors knew it was coming doesn’t mean they liked it. The Dow dropped 560 points on Wednesday and Thursday.

Investors recovered their mojo on Friday. The Dow Jones industrial average rose 31 points to 14,791 in late afternoon trading. The Standard & Poor’s 500 index was up four points to 1,591.

The gains were led by high-dividend stocks that investors favor when they want to play it safe. Makers of consumer staples, utilities, and health care companies rose the most of the 10 industries in the S&P 500 index. Only technology stocks fell.

All user comments are subject to our Terms of Service. Users may flag inappropriate comments.
comments powered by Disqus

Featured Businesses


Info Minute

Gas Prices

Wilkes-Barre Gas Prices provided by GasBuddy.com