Power Breakfast: Fed statement boosts stocks, Atlanta income up, nuke safety, immigration, SunTrust, oil

The stock market accomplished one thing yesterday — a big gain — but not without wild swings. Let’s see if another sizable gain can come today, but without such nerve-wracking volatility.

The Dow Jones industrial average surged more than 429 points, its tenth-highest point gain in history and the biggest since March 2009, Associated Press writes. It was just one day after the Dow had its worst point decline since 2008.

Credit the Fed.

The Federal Reserve pledged to keep its key interest rate at its record low of nearly zero through the middle of 2013, AP reports.

Bob Doll, chief equity strategist at BlackRock, said the Fed’s decision to hold interest rates at a very low rate for two years is “unprecedented” and called it a kind of “backdoor quantitative easing,” AP writes. In June, the central bank finished a second round of buying Treasury securities, also known as quantitative easing, in hopes of boosting the economy.

“Markets are going to do what they would have done if the Fed went out and bought securities,” Doll said. He said he expects investors will return to stocks after the broad sell-off of the least few weeks.

He expects stocks to continue to rally because a slow-growing U.S. economy won’t harm corporate profits, AP writes. As a whole, the companies in the Standard & Poor’s 500 index reap more than half their revenue overseas. What’s more, companies have already cut costs significantly, have hoarded cash and squeezed more production out of workers. Even as the U.S. economy has slowed, the S&P 500 as a whole was expected to earn record profits this year, AP writes.

In the AJC:

In other media:

– Henry Unger, The Biz Beat

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7 comments Add your comment

Tamika

August 10th, 2011
7:20 am

Promising historically low rates for two years is an extraordinary step. I was shocked by the Fed’s promise. Of course the market loved it. Now we get to see if the fed has the balance sheet to back it up or if they are just going to print the money.
I wonder how this promise will look in a month.

Homer

August 10th, 2011
7:59 am

“He expects stocks to continue to rally because a slow-growing U.S. economy won’t harm corporate profits, AP writes.”

And there you have it. Both sides of the aisle can scream to high heaven about what they are or aren’t doing about jobs but it ain’t happening so quit whining about jobs.

independent

August 10th, 2011
9:48 am

is Obama focusing on job creation ?? ideas to stimulate hiring ?? No.. he and his group are attacking Romney !! what ?? no bipartisian leadership … suprised ?? not me.. he’s a political animal !!! that’s all he knows.. doesn’t understand businees.. never had any private sector experience ( job ) at all !!!

Nyshauwanna

August 10th, 2011
10:52 am

It looks like a desperation move, they’ve tried almost everything else.

A lot can happen in the economy in two years. I think their pledge will come back to haunt them.

banks

August 10th, 2011
3:20 pm

more giveways by the federal government to big banks. They can borrow for nothing, make tons of money sticking it to their borrowers. Congrats Fed!

independent

August 10th, 2011
4:35 pm

I Don’t have any HOPE….. and very little CHANGE left…… Owebama…. Resume says experience with ACORN.. one term senator who voted present all the time.. .. no other job.. military… etc… Ross Perot said if he hired Bill Clinton.. he would have made him supervisor on the night shift… until he had more experience… more so with Owebama…. expect more unemployment.. weak economy… private sector jobs ??? businessmen who invest their own time and money $$… are scared to death.. no progress on bringing our troops home.. which would have been the only reason for voting Obama…..

more money

August 11th, 2011
9:55 pm

where my change obama said I get? I’m more broke than when he came in. where my money?