Dow Jones Stock Market Update: Stocks Surge Off Fed Announcement
The S&P 500 surged over 20 points and the DOW shot up 225 points Thursday morning as stocks continued to rise after yesterday's announcement from the Federal Reserve Board that they will be "patient" in raising interest rates, and will wait a "considerable time" before doing so.
It is estimated that rates will rise no sooner than halfway through 2015. Showing faith in the domestic economy while being cautious on a global economical scale, the Fed injected good vibes into the U.S markets all around as the DOW and S&P 500 had their best days of the year on Wednesday.
Today is the continuing of that rise as Federal Reserve Chair Janet Yellen's words ring throughout the market.
She noted yesterday that the current dramatic drop in oil prices was "transitory" and that they would right themselves soon enough. Although Yellen is no oil analyst, the market still heeded her call to action and there was a significant rally all throughout the energy sector.
Her reassurance was needed as the price of a barrel of oil dropped below the $60 mark recently, with little recovery being seen in the various markets. OPEC currently has no plans to intervene and is standing firmly by its decision to maintain a production ceiling.
There is certainly the possibility that oil may continue to drop even further, though it seems no oil market is willing to give up market share and reduce production. Many of these are currently producing at a loss or with very little profit. The price of a barrel is already down almost 50 percent from its peak in June, and should it drop any further, small profits will turn into losses.
The barrel is currently at its lowest price since 2009 and is expected to continue sliding. Should the barrel breach the $40 mark, it is likely some sort of OPEC action will be taken. But for now, the market is strong and filling your gas tank is more affordable than it's been in years.
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