Rise on Wall Street ahead of Fed’s meeting

December 11, 2007

Strong rally was seen on Dow Jones and NASDAQ on Monday with an expectation of interest rate cut by Federal Reserve in coming meeting.

Investors hang about ahead of the Federal Reserve decision on interest rate cut on Tuesday, but majority of policymakers are still split over whether there will be a 0.25 basis or 0.50 basis cut. The National Association of Realtors bestows stock investors about their forward-looking index of U.S. home sales rose in October for the second month in a line, but still investors expect the housing market to remain weak well into 2008, the association is forecasting sales and prices to start recovering modestly next year.

According to UBS the financial stocks have already discounted the worst case scenario and may be a good stock investing opportunity on a longer term.

As compared to last month which was worse volatile month for Wall Street, this month the Wall Street has showed excellent performance as investors gained more confident in the Fed's directness to loosening its policy again. The Dow Jones has rose more than 740 points over the last two weeks, a rally that has brought the blue-chip index to about 3% below the record close it reached Oct 9.

On Monday The Dow Jones closed at 101.45 points higher, or 0.74% to 13,727.03. The Standard & Poor's 500 index rose 11.30, or 0.75% to 1,515.96. The Nasdaq composite index rose 12.79, or 0.47%, to 2,718.95.