Stocks Inch Higher As Investors Look To Fed
Stocks edged higher Monday as investors avoided making any big bets before the Federal Reserve's key meeting later in the week.
Investors are waiting for the Fed's latest assessment of the economy, just days after a disappointing monthly employment report.
The market got a modest lift from a new report that showed Europe's economy is recovering faster than expected. Mixed corporate news was also keeping traders from making any big bets Monday.
The Dow Jones industrial average rose 14 points in early morning trading. Broader indexes also posted modest gains.
Hewlett-Packard Co. shares slipped after its CEO was forced to resign over the weekend. McDonald's rose after it reported strong July sales. Both are Dow components.
European markets jumped after German exports reached their highest levels since late 2008, indicating the country's economy is recovering much faster than previously thought. There were concerns this spring that mounting government debt in countries like Greece, Spain and Portugal would stagnate Europe's economy. The German exports report was the latest data from the continent that showed the pace of growth is speeding up rather than slowing down.
Recent reports about the domestic economy have shown just the opposite — that the recovery is losing steam. Concern about the pace of the U.S. economic recovery has added to the importance of the Fed's meeting Tuesday. There are no economic reports due out Monday that could provide investors with clear signs about the recovery.
The Fed will likely leave interest rates at historic lows, but could signal plans to restart some stimulus programs.
The Fed let many programs expire this year, such as purchasing mortgage-backed securities, as it appeared the recovery was gaining steam. The Fed could hint Tuesday that it is ready to start new programs to encourage lending even if it doesn't implement them immediately.
In the statement that accompanies the interest-rate decision, the Fed is expected to provide its assessment of future growth. Chairman Ben Bernanke spooked markets just a few weeks ago when he said the forecast for recovery remains "unusually uncertain."
Momentum has slowed as companies remain skittish about hiring a significant amount of workers and people worried about their jobs cut back on spending. Analysts have said strong economic growth will not occur until there are consistent signs that private employers are ramping up hiring.
In early morning trading, the Dow Jones industrial average rose 14.46, or 0.1 percent, to 10,667.79. The Standard & Poor's 500 index rose 1.74, or 0.2 percent, to 1,123.38, and the Nasdaq composite index rose 7.32, or 0.3 percent, to 2,295.79.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
