Wall Street stopped worrying and learned to love the taper. The Dow Jones industrial average jumped more than 290 points after the Federal Reserve surprised some experts Wednesday by announcing a modest reduction, or tapering, in its bond buying program. The S&P 500 and the Nasdaq also moved substantially higher. The Dow and S&P both ended at new closing highs.
The bullish response is somewhat curious, since investors were rattled when Fed chair Ben Bernanke first talked about tapering back in May. In recent months, stocks would often fall on good economic news because the market worried that it might mean the tapering was one step closer.
Some market watchers had still been holding out hope that the Fed would announce tapering after Bernanke’s tenure ends in January. But the job market has been improving and Bernanke told reporters that he and other Fed officials — including current vice chair and Bernanke successor Janet Yellen — believe the economy will continue to create jobs.
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