Dow Jones Today Rising as Market Digests Fed Statement

The Dow Jones Industrial Average (DJINDICES: ^DJI  )  was up 107 points, to 16,330, at 1:30 p.m. EDT after positive reports on the economy and time to digest yesterday's news from the Federal Reserve. The S&P 500 (SNPINDEX: ^GSPC  ) was up 10 points to 1,871.

Twenty-five of 30 Dow stocks were rising in early afternoon. They are being helped by three decent U.S. economic releases today, though the main focus is the Fed's latest statement and press conference.





Weekly new unemployment claims




Existing home sales


4.60 million

4.62 million

Leading economic indicators




As expected, the Federal Open Market Committee announced another $10 billion taper of its long-term asset purchases (now heading down to $55 billion per month) and updated its position on what economic gauges would help determine when it would raise rates. You can read a dissected version of the Fed statement here.

The Fed reiterated its standard assertion that "it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends," but added that "The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run." Many immediately read this as the Fed extending its view on how long it would keep short-term interest rates low.

Speaking to reporters after the statement was released, Fed Chairwoman Janet Yellen said that "considerable time" meant just six months or so. That was more in line with general expectations before the central bank released its statement. Yellen also said the Fed is trying not to be a source of instability; in her first press conference as chief, though, she certainly failed in that goal.

The key point is that interest rates of close to zero are here to stay for another year or two. That's good news for banks, but bad news for savers.

Foolish takeaway
So what can an investor do in times like this when the market is overvalued? It's hard to stay sober while everyone around you is drunk on Fed-stimulus punch, telling you to join in on the fun. My advice: Keep learning, focus on your goals, have an investing plan, stick to it, and ignore the crowds.

As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2883596, ~/Articles/ArticleHandler.aspx, 9/2/2015 2:37:24 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Dzombak

Dan Dzombak has written for The Motley Fool since 2008. He covers value investing, investing process, and success among other things. You can follow him on Facebook or Twitter by clicking the buttons below or head over to his blog at

Today's Market

updated 5 hours ago Sponsored by:
DOW 16,058.35 -469.68 -2.84%
S&P 500 1,913.85 -58.33 -2.96%
NASD 4,636.11 -140.40 -2.94%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/1/2015 4:35 PM
^DJI $16058.35 Down -469.68 -2.84%
^GSPC $1913.85 Down -58.33 -2.96%
S&P 500 INDEX CAPS Rating: No stars