In his comments to the U.S. Congress today, Federal Reserve Chairman Ben Bernanke signals that the Fed will continue its policy of Quantitative Easing, the Bond Buying Program that has been a cornerstone of the Fed’s easy money program for the past few years. Bernanke noted that the Bond Buying program has help stabilize and grow the economy and economists and Wall Street expects that QE will continue, at least for some time, in the slowly growing economy.
Traders on Wall Street reacted to Bernanke’s comments and yesterday’s and today’s housing numbers. January pending home sales released today moved up to their highest numbers since April 2010. Those numbers came on top of better than expected numbers for home prices and sales released yesterday.
On the EU front, Italy’s successful sale of €6.5 in bond sales raised confidence in the European Market, which was somewhat in turmoil following Italy’s elections earlier this week. It seems all of that news encouraged investors to by securities. The Dow posted its highest closing in five years, closing at 14,075. It will be curious to see what happens in the markets come Friday should the U.S. be unable to avoid the Sequester, which has become the new four letter word.