After swooning on Monday following S&P’s downgrade of US bonds, stocks posted gains on Tuesday as investors saw the over-reaction as a buying opportunity. Now investors look to see what the Federal Reserve policy board might say after their meeting later today.

By noon the Dow was up 2.07%, the S&P was up 2.66% and the Nasdaq rose 3.15%. More volatility is predicted for the road ahead.

It’s suspected that the board might hint at “QE3,” but fall short of implementing it. “QE3” means “quantitative easing,” when the central bank buys assets from banks using electronically created money. The 3 refers to how this would be the third round of America using this tool.

Did you make any moves with your money in response to recent financial news or are you sitting tight?

Stocks Post Gains in Break From Gloom on Wall Street [NYT]

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