Dow jumps 150 points
NEW YORK — Will they or won’t they? With the Federal Reserve’s final meeting of the year wrapping up on Wednesday, investors are waiting to see if the central bank will begin to cut back, or taper, its massive stimulus program.
But they didn’t seem too worried Monday. The Dow jumped more than 150 points, or 1%, in early trading Monday, while the S&P 500 and Nasdaq also rose nearly 1%.
The gains were broad-based, with 27 out of 30 Dow members higher, and more than 80% of the S&P 500 booking gains.
The Fed’s bond buying has supported stock markets around the world, and more investors believe the Fed will move sooner rather than later as economic data continue to improve.
“[A] growing minority now believe that the Federal Reserve could start to taper at this week’s meeting,” said Kathleen Brooks, a research director at Forex.com, adding that only a few weeks ago, most on Wall Street were expecting the Fed to announce tapering in the early part of 2014. By that time, Janet Yellen will be leading the Fed, succeeding Ben Bernanke, whose term expires at the end of January.
The Fed has been pumping trillions into the economy since December 2008. It’s been injecting $85 billion per month since September 2012 through its third round of bond purchases, a program known as quantitative easing.
In corporate news, AIG rose after the insurer reached an agreement to sell its airline leasing business to AerCap Holdings for $5.4 billion. AerCap surged on the news as well.
Shares of Sprint rose following reports from The Wall Street Journal that it was working on a deal to acquire T-Mobile.
Google agreed to buy Boston Dynamics, a builder of military robots.
European markets climbed in morning trading, with Germany’s benchmark Dax index up by roughly 0.6%. Asian markets ended with losses. Japan’s Nikkei slumped by 1.6% as the yen strengthened, hitting companies that depend on exports.
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