Stocks open higher as Fed ends two-day meeting
NEW YORK (AP) — Stocks opened higher on Wall Street, extending a five-day winning streak, as investors awaited news on whether the Federal Reserve will announce more bond purchases to stimulate the U.S. economy.
The Dow Jones industrial average was up 38 points at 13,286 as of 9:46 a.m. in New York. The Standard and Poor’s 500 was up four points at 1,432. The Nasdaq composite was up eight points at 3,030.
The U.S. central bank is expected to announce a revamped bond-buying plan at the end of a two-day policy meeting today to help hold down interest rates and encourage borrowing. The expectation is that the Fed will unveil a program today to buy $45 billion a month in long-term Treasurys. That would replace a program that expires at the end of the year.
Wall Street will also keep an eye on budget talks in Washington. Lawmakers are still trying to reach a deal to avoid the looming “fiscal cliff,” the sharp tax increases and spending cuts that will hit the economy in January if Congress and President Barack Obama are unable to thrash out an agreement.
House Speaker John Boehner and President Barack Obama spoke on the phone Tuesday, a day after the president offered to reduce his initial demand for $1.6 trillion in higher tax revenue over a decade to $1.4 trillion. Obama continues to insist that much of the revenue comes from raising top tax rates on the wealthy.
Both the Dow and the S&P have advanced for the past five days as optimism increased that a deal can be struck. The S&P is trading at its highest in five weeks and has now erased all of its post-election losses. Stocks fell immediately after the vote Nov. 6 on concern that a divided government would struggle to resolve the budget issue.
The yield on the 10-year Treasury note rose 1 basis point to 1.66 percent.