Now that we have the outcome of the two-day FOMC meetings, the markets can absorb the expectations of a continuation of Operation Twist. The announcement from the Federal Reserve is in line with expectations and despite a sudden drop after the announcement, the Dow Jones Industrial Average
Instead of immediately lowering interest rates at already near-record lows, the strategy the Fed is employing to bolster the struggling economy is selling short-term bonds and taking the proceeds to purchase long-term bonds, which in theory lowers long-term interest rates.
Only time will tell if the extension of Operation Twist will correct a distraught economy, but with European debt problems countering attempts to infuse money into the markets, it is unlikely we will experience less volatility and fear.
Also in the Dow, there is a tale of two companies, with Procter & Gamble
Outside the Dow, the Whopper makes it back to Wall Street as Burger King
Take a long-term view
With two of the three market-changing meetings now in the books, the volatile markets now focus on the European Council meeting taking place next week. The markets will not make a speedy recovery, meaning now is as important as ever to find outstanding companies that can outperform in the long run as well as supply healthy dividends in the volatile near future. For this reason, The Motley Fool has released a new free report detailing three Dow stocks dividend investors need. This report is free, but it will only be offered for a limited time, so get your copy now.
Joel South owns shares of no company listed above. The Motley Fool owns shares of Cisco Systems and JPMorgan Chase. Motley Fool newsletter services have recommended buying shares of Procter & Gamble. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.