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Stocks Rise on Fed Stimulus Hopes

iStockphoto/Thinkstock(NEW YORK) -- Despite worries about Europe’s debt and financial crisis, U.S. stocks are up for a second straight week.  The big-stock Standard and Poor’s 500 Index and the Nasdaq have made gains four days in a row.

Analysts say since Greece’s election on Sunday attention has turned to the Federal Reserve and its two-day meeting. There’s widespread speculation on Wall Street that the Fed will extend Operation Twist, a program that sells short-term government paper and replaces it with purchases of longer-term bonds.  The aim of this program is to keep benchmark borrowing rates for mortgages and other loans as low as possible.  With signs the U.S. economy may be weakening, the Fed may also launch a new round of quantitative easing.

A third possibility is that Fed policymakers could decide to extend their statement on keeping very low interest rates beyond 2014.

The Dow Jones industrial average rose 112 points to 12,843 at mid-day.

Copyright 2012 ABC News Radio

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