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Stocks Fluctuate Despite Fed Chair's Testimony

Stocks Fluctuate Despite Fed Chair's Testimony

Stocks took a hit Wednesday despite the news that the Federal Reserve is not looking at ways to stop the quantitative easing.

Also called QE3, the Federal Reserve's assest-purchasing program is believed to be largely responsible for the big rally on Wall Street.  But, news came out Wednesday that the Fed is not looking to end the bond buying.

Simon Constable with the Wall Street Journal says when the Fed does start paring back the asset-purchasing programs stocks will take a hit, "...depending on the economy that could happen in the next few months."

The record rally on the Dow Jones Industrial Average will likely drop back below 15,000 when the Fed reduces their bond buying and increases interest rates, according to Constable, "Maybe stocks won't like it initially but if the economy is doing better, more people will have jobs and they'll be spending money and the companies in the markets will be making more money for themselves."

Constable says that any investor should plan for the long-haul and says any blip in the markets in the next few months will not matter at all.

 

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