When you are looking for signs of economic improvement, interest rates are the first piece of economic data you should review. When the Federal Reserve keeps interest rates low, it generally means the economy isn’t doing so well and they want to stimulate spending. When they raise rates—even incrementally—then we know we are working on a comeback. Unfortunately today the Fed announced that they would hold interest rates where they were and that we could expect more of the same during the foreseeable future. Combine this information with the negative news in yesterday’s housing report and the fact that European and Asian markets were mostly down on Wednesday (the Hang Seng being the only up market) and you have a recipe for a down day. So it was no real surprise when the Nasdaq fell 7.57 points to close at 2,254.23 and the S&P 500 closed at 1,092.04 a drop of 3.27 points.
What was surprising was that the Dow Jones Industrial Average broke its three-day losing streak to close up 4.92 points at 10,298.44. It is possible that anticipation about the results of the upcoming G-20 meeting could be keeping investors hopeful.
