Wall Street Gets a Lift From Hopes for More Fed Moves

Reuters/Brendan McDermid

Reuters – By Angela Moon                    June 19, 2012

(Reuters) – Stocks rose on Tuesday on hopes that the Federal Reserve will agree to extend stimulus measures as the economy struggles to recover and the euro zone’s debt crisis gets worse.

The S&P 500 has gained 7.2 percent from a five-month intraday low reached on June 4. On Tuesday, the benchmark index closed above its 50-day moving average of 1,346.90 for the first time in seven weeks. But the sharp gains leave the market vulnerable if the outcome of Wednesday’s Fed meeting doesn’t meet market expectations.

“People are anticipating some type of response from the Fed tomorrow, and are buying or covering shorts in anticipation of that,” said Paul Zemsky, head of asset allocation at ING Investment Management in New York. “There’s a risk the market gets disappointed.”

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