Federal Bond Purchases Decrease Sending Stock Markets Up
(AP) — The stock market is up after the Federal Reserve announced a decision to reduce bond purchases by $10 billion starting in January.
The Federal Reserve says it will continue to decrease purchases next year if improvement continues.
The Fed voted Wednesday to reduce its $85 billion in monthly bond purchases by $10 billion. The Fed has been buying $85 billion bonds for a year.
The bond purchases have helped keep long-term interest rates low to encourage more borrowing and spending.
The Dow Jones industrial average was up 151 points, or 1%, to 16,028 as of 2:10 p.m. It was up 47 points shortly before the Fed's announcement.
The Standard & Poor's 500 index rose 11 points, or 0.6%, to 1,792. The Nasdaq composite climbed five points, or 0.1%, to 4,028.