Stocks backed off their multi-year highs on Monday, with no substantial economic news either positive or negative. On Tuesday the Dow earned back its Monday’s loss as some investors began banking on the idea that the Fed would introduce additional quantitative easing in the near future. The markets inched up a bit on Wednesday, once again setting a five year high for the Dow. On Thursday, the long-awaited quantitative easing was announced, with the Fed pledging to buy $40 billion in mortgage-backed securities per month. Such an action is expected to drive investors out of bonds and back into stocks. Stocks responded to the move by moving up well over a percent. The major indexes finished the week on Friday by tacking on additional gains as euphoria from the quantitative easing was still present. Once again, the Dow set a multi-year high.
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