Dow Jones Has Highest Single Day Total In 5 Years

by Darren

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Investors don’t know what to expect next, and that’s made the stock market a volatile place to be. Today the Dow Jones ended up rallying by 286 points, which is a five year high. The one thing on everyone’s mind is credit, and how much of an impact the announcement of the new interest rate will have on it.

Investors tried to balance their concerns about the availability of credit with hopes that Tuesday’s Federal Reserve meeting will be a calming influence after two weeks of frenetic trading on Wall Street. In a day devoid of economic news and with few earnings reports, investors early in the session seemed to avoid making big bets, though stocks gained steam after midday and made their biggest advance in the final two hours.

Fed policy makers are widely expected to hold the nation’s benchmark rate steady at 5.25 percent; as usual, the greater concern is with the Fed’s economic assessment statement. This time, investors will be looking to see what the Fed says about credit.

Even though the Dow ended up high, it isn’t a reason for most investors to get excited. The volatility has been enough to keep everyone nervous, ahead of tomorrow’s meeting with the Fed.

Short covering and portfolio shifts could explain high volume, as no one wants to be left “holding the bag” in the event of a wrong guess about interest rates.

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