Futures Market News
Stocks rise as investors eye potential Fed stimulus
Aug 09, 2010 08:37 AM
European equity indexes rose and delivered a boost to U.S. stock index futures on Monday morning. The persistent weakness in U.S. labor markets led many to believe that Federal Reserve chairman Benjamin Bernanke will extend the central bank's efforts to stimulate the economy.
Dow Jones Industrial Average index futures climbed 47 points to 10,660, while S&P 500 futures were up 5.3 points to 1,124.80 at 8:30 a.m. EST. Nasdaq 100 futures rose 7 points to 1,909.50.
The Federal Reserve will meet this week, setting monetary policy which will determine whether or not the bank decides to engage in further quantitative easing - the buying of assets with newly-printed money, effectively increasing the money supply.
Many believe that the Fed's continued efforts to stimulate the economy through QE will lead to runaway inflation, while others say that the velocity of money is too low, because banks and companies are simply hoarding cash and going into emergency-saving mode.
The speculation helped drive European stock indexes up, though, in addition to dollar-priced assets like copper. It seems likely that suggestions of QE will benefit U.S. equities as well.
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