The Federal Reserve extended Operation Twist, but stopped short of QE3. Even though it is only a $267 billion program extension to the end of the year, the psychological boost helped the bulls erase a 10 point drop by close. It helps when the bulls know that Ben will be there through the end of the year supporting prices, but the deteriorating economy and jobs market will probably provide some headwinds soon. With the rate decision out of the way, the focus will shift to next week’s European Union summit.
