Stock market surges after surprising fed decision - FOX5 Vegas - KVVU

Stock market surges after surprising fed decision

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LAS VEGAS (FOX5) -

There was an immediate reaction on Wall Street after Federal Reserve Chairman Ben Bernanke announced the decision to maintain the central bank's $85 billion of monthly bond purchases to keep interest rates low and encourage stock purchases.

"The committee decided to await more evidence that the recovery's progress will be sustained before adjusting the pace of asset purchases," Bernanke said.

The surprising move drove the dollar down and shot the market up.

"What that means is that interest rates will continue to remain low and they're anticipating they will continue to remain low into next year," said financial advisor Robert Disman.

In the last 4 1/2 years the market has gone up about 140 percent.

But eventually the stimulus will taper off and there's fear that the market will correct itself downward in a big way.

"My concern is, from past experience, the market doesn't go up forever," Disman said. "We might be a lot closer to the high than the foreseeable low."

The unknown question is when the fall will happen and how much it will go down.

It has financial advisors saying investors should use caution.

"Anybody thinking about investing in the market now might want to consult with their financial adviser," Disman said. "This might not be a good time to be putting money in the market now."

There are some land mines ahead for the financial markets.

The $16.7 trillion debt ceiling will be reached next month and Congress will have to decide whether to increase it or face a government shutdown.

And Bernanke is stepping down, which could cause a shift in thinking.

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