After falling nearly a full percentage point in early morning trading, the Dow
Why the change of heart, you ask? The Federal Reserve announced that it expects to be holding short-term interest rates near zero through 2014.
To be frank, it's a bit silly -- though not surprising -- that the market rallied on this news. No one expects us to be back near full employment by that time, and with the economy in a liquidity trap, core inflation won't be up, either. That means that the conditions requiring low interest rates will still be in place two years from now.
Cyclical Dow components like Caterpillar
Mortgage REITs, led by Chimera
The Dow surged today, but it's important for us to remember that what happens to stocks on a day-to-day basis matters far less than their long-term performance. If you're interested in one stock that our chief investment officer picked to crush the market in 2012, check out our brand-new report, "The Motley Fool's Top Stock for 2012." It highlights a company that is revolutionizing commerce in Latin America. For a limited time, you can get instant access to the name of this company for free.
Ilan Moscovitz doesn't own shares of any company mentioned. The Motley Fool owns shares of Chimera Investment and Annaly Capital Management. Motley Fool newsletter services have recommended buying shares of Annaly Capital Management. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.