US stocks fell as much as 1% on the weak consumer confidence reading before clawing back their losses and closing greater. Gold and oil prices each jumped 2%, while Treasuries rallied as investors piled into safe-havens on worries concerning the economy.
"The Fed has recognized that economic conditions may warrant more intense actions, which gives hope to the prospect that something will be forthcoming in the next meeting that will provide more to goose risk assets, " stated Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia
Consumer confidence in the usa hit a two-year low in August and prices of single-family homes dipped in June from May since the housing market continued to crawl along at depressed levels, data showed upon Tuesday.
Minutes from a Federal Reserve meeting this month, also released upon Tuesday, showed the central bank had considered a range of actions to assist a struggling economy, including the unprecedented step of tying interest rate policy outlook to some specific unemployment level.
The Fed minutes helped Wall Street end up for any third straight session. The market closed up nearly 3% on Monday, its strongest gain inside a week, but for the month-to-date, the S&P index is down 6. 14%.
"It appears like we're having some follow-through to yesterday's move, which is an indication things have gotten overdone previously month. People are reassessing and seeing some value, " said John Derrick, director of research around Global Investors in San The Fed initiative help Antonio, Texas.
The Dow Jones commercial average closed up 20. 70 points, or 0. 18%, at 11, 559. ninety five. The Standard & Poor's 500 Index rose 2. 84 points, or 0. 23%, from 1, 212. 92. The Nasdaq Composite Index ended up 14. 00 factors, or 0. 55%, at 2, 576. 11.
Thin volume helped to exaggerate the actual moves.
OIL, GOLD SHINE WITH BONDS; EURO DOWN
Benchmark 10-year Treasury notes touched a session a lot of 99-21/32, up 28/32 from late Monday, after the consumer confidence data. Late within the day, the 10-year note was up 23/32, its yield at 2. 1828%.
Place gold, which tracks trading in bullion, was up 2%, reaching nearly $1, 833 a good ounce.
"The market is certainly pretty nervy as are most markets at this time, so in the context of what's been happening in the last couple of days, I'm not surprised to see that kind of move, " said Credit Suisse gold and silver analyst Tom Kendall.
Bullion is up nearly 30% on the year. Among the cornerstones of its rally over the last eight months has been the actual Fed's ultra-loose monetary policy, which included a pledge to leave rates near zero until 2012 following a $600 billion bond-buying program that expired in June.
In oil trading, London's Brent crude wound up 2% at a four-week high above $114 a barrel as traders tracked newly formed Tropical Storm Katia within the eastern Atlantic and ahead of hopes for more economic stimulus by the actual Fed.
Investors are anticipating a planned speech next week by Fed Chairman Ben Bernanke that may hint at any monetary expansion.
Markets will also be watching euro zone debt issues for signs the region's troubles don't worsen. Reuters on Monday reported detailed proposals put forward by Finland regarding its demand for collateral in substitution for providing more aid to Greece.
Helsinki's demands for collateral have sparked demands from other countries, including Austria, the Netherlands, Slovenia and Slovakia, for similar treatment and may jeopardize euro zone attempts to save Athens from default.
The euro had been down 0. 4% at $1. 44485, retreating from Monday's two-month high associated with $1. 4550.