It was a decent day on Wall Street in anticipation of Fed comments due on Wednesday wrapping up their two day meetings. The Dow finished up over 100 to 17131.97, the S&P 500 is edging closer to the 2000 mark rising 14.85 while the NASDAQ settled in at 4552.75 at closing.

The reason for today’sdow sp 500 up gains is a general conviction that the Fed will sit tight and keep rates where they are for some time yet that could change within a few moments tomorrow afternoon. 
Fed comments are made at a news conference shortly after their meetings. One thing investors are sure of is another round of pullback from QEIII to the tune of another $10 billion leaving $15 billion on the table for late October meetings.

Mortgage bonds and Treasuries also benefited today as well keeping rates near their current range. It’s still the expectation that financing costs will remain low through the end of October at the very least but some investors are not so sure how the markets will react once the QEIII demise becomes a reality. Fed stimulus has been fed to the economy for so long it’s curious to see how the markets will react when the well indeed runs dry. And with all the money printed over the years inflation is still, at least not yet, a concern.

The producer price index was released today and reported a scant 0.1 percent rise for July but for August there was no change at all. No inflation at all and over the past 12 months prices have risen just 1.8 percent, still well below the 2.00 percent Fed target. The retail price gauge, the consumer price index is scheduled for release on Wednesday.  As for the rest of the week, only the first time unemployment claims numbers will be released but they’re expected to have little impact.