Stocks Tilt Back Up After Fed Speaks

Stocks and bonds rose Tuesday after the Federal Reserve said it was ready to provide more help to the economy if necessary.

The Fed didn’t announce new purchases of government debt or other specific measures to help the economy now, but it did leave the door open to such steps in the future, as investors were hoping.

The central bank said that inflation remains below levels that indicate a healthy economy, and that it was ready to act to provide “additional accomodation” to support the recovery, if needed. That could mean more purchases of Treasury bonds or other debt, which would keep interest rates low.

Stocks had been trading lower ahead of the Fed’s announcement but turned higher in afternoon trading shortly after the central bank’s statement was released.

The Dow Jones industrial average rose 44.50 points, or 0.4 percent, to 10,798.12 in afternoon trading. It was trading slightly lower for most of the day before the Fed’s announcement came out.

Broader indexes had more modest advances. The Standard & Poor’s 500 index rose 1.27, or 0.1 percent, to 1,143.98, while the Nasdaq composite rose 1.97, or 0.1 percent, to 2,357.80.

The gains extended a three-week rally that has defied expectations that stocks would slump in September, which is historically a weak month for stocks. The Dow is up 7.9 percent so far this month, and broader indexes are up even more. The S&P is up 9.1 percent, the Nasdaq 11.6 percent.

Treasurys rose after the Fed’s announcement, sending interest rates lower. The yield on the 10-year Treasury note fell sharply to 2.60 percent from 2.70 percent the day before. Its price jumped 90.6 cents to $100.18. The yield is a common benchmark for setting interest rates on corporate debt and mortgages.

STEPHEN BERNARD, AP Business Writer NEW YORK