Stocks Cut Losses On Fed's Economic Stimulus Plans

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bern Stocks Cut Losses On Fed's Economic Stimulus Plans

Federal Reserve Chairman Ben Bernanke (AP, File)

Stocks have recovered some of their losses after investors reacted positively but still cautiously to news that the Federal Reserve is taking steps to stimulate the economy.

The Fed, in a statement issued after its policy meeting Tuesday, said it will use money from its investments in mortgage securities to buy government debt on a small scale. That could help send long term rates on mortgages and corporate debt slightly lower. 

Fed Takes Small Steps To Boost Economy

Investors apparently see the moves as a sign that the Fed is willing to step in, but that it doesn’t view the economy as needing more dramatic action right now.

The Dow Jones industrial average, down about 100 points before the Fed announcement, was off 15 at 10,684. The Standard & Poor’s 500 index was off 2 at 1,125. The Nasdaq composite index was down 22 at 2,282.

(Copyright 2010 by The Associated Press.  All Rights Reserved.)

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