NEW YORK — Investors are getting optimistic that the Federal Reserve will restart some economic-stimulus programs.
Stocks closed moderately higher Monday, a sign that many traders expect the Fed to take steps to put some energy back into the recovery. The Dow Jones industrial average rose 45 points, more than making back its loss from Friday.
Volume on the New York Stock Exchange fell to its lowest level of the year as many investors stayed out of the market while they waited for the Fed’s decision. Many have been avoiding big investment decisions for much of the summer because they have no sense of where the economy is headed.
The Fed’s assessment of the economy, and any plans to resume its stimulus measures, will be issued after its meeting ends this afternoon.
“The market loves stimulus. The market wants stimulus,” said Joe Saluzzi, co-head of equity trading at Themis Trading LLC in Chatham, N.J.
The Fed will likely leave its federal funds rate near zero, but the central bank could signal plans to restart some programs such as purchasing mortgage- backed securities or buying Treasury bonds. The programs ended earlier this year.
“The Fed has a lot of tools in its tool shed,” said Larry Rosenthal, president of Financial Planning Services in Manassas, Va. “They have to bring buyers back into the market; they have to bring consumption back into the market.”
The recovery has stalled as consumers, watching the labor market stagnate, have been reluctant to spend. Meanwhile, bank lending has stayed low.
The Dow rose 45.19, or 0.4 percent, to 10,698.75. On Friday, the Dow fell 21 points after investors were disappointed by the government’s July jobs report.
The Standard & Poor’s 500 index rose 6.15, or 0.6 percent, to 1,127.79, and the Nasdaq composite index rose 17.22, or 0.8 percent, to 2,305.69.
