Policy makers at the FOMC are definitely less downbeat, saying contraction is easing and that steps already taken will lead to a gradual return to growth. Stocks rallied with the S&P 500 ending near its highs, up 2.2 percent at just under 875. Having little effect were late reports that Chrysler, as part of an alliance with Fiat, will file for bankruptcy tomorrow.
The dollar firmed 1/2 cent in immediate reaction to the FOMC statement, ending at $1.3250 to the euro. With conditions stable, the FOMC did not announce any new outright purchases, a factor that hurt Treasuries where the 10-year yield rose 9 basis points to end at 3.09 percent. Gains in the dollar held down many commodities including gold, ending at $900, and oil, ending under $51. Hog prices, down about 1.5 percent, fell for a third day in reaction to the swine flu crisis.