Investors were nervous today as was evidenced by the Dow Jones Industrial Average’s drop of as many as 141.46 points before 10 AM. Anticipation of The Federal Reserve’s Federal Open Market Committee (FOMC) meeting notes and concern over the action the Fed would to take to help boost the economy were likely the reason.
As expected, the FOMC report noted the continual contraction of bank lending and the slowing of employment. The report also mentioned the modest increase in household spending that is likely modest due to employment and income tightening. In order to help the struggling economy the Fed announced that they would invest in long-term Treasuries. You can access the full report here.
The Dow continued to be rocky after the statement was released but regained some of its early morning losses, falling 54.50 points to 10,644.25. The Nasdaq fell 28.52 points to 2,277.17 and the S&P fell 6.73 points to 1,121.06.
In anticipation of the expiration and possible renewal of the Bush tax cuts, many economic experts including former Federal Reserve chairman Alan Greenspan have been coming out and speaking about their support of the expiration of the cuts. But many oppose their expiration and are pushing for them to be renewed so that the economy does not weaken further due to reduced spending. The tax cuts are set to expire this year and the debate will probably continue to play a role in the fluctuation of the market.
European and Asian markets closed down on Tuesday.
