Stocks rise after big fall

Bargain hunters helped push the Dow back above 11,000 briefly today. The Dow Jones industrial average rose 193 points, or 1.8%, to 11,003 in morning trading. On Monday, the Dow had its worst day since 2008. It plunged 634.76 points as fear coursed through global markets. Investors worried about the first-ever downgrade to the U.S. credit rating, the slowing U.S. economy, debt problems in Europe and rising inflation in less-developed countries. Hope that the Federal Reserve may announce more help for the economy in the afternoon also lifted stocks. “Prior to the recent turmoil, we had thought the Fed would stand pat” at its policy meeting on today, says Paul Dales, senior U.S. economist with Capital Economics. “But now some action seems likely.” The central bank already has kept its key interest rate close to zero since 2008. The Fed in June ended a $600 billion program to buy Treasurys as a way to support the economy. Some Fed officials oppose another round of so-called quantitative easing because it could lead to higher inflation. When the central bank issues its statement this afternoon, many economists don’t expect to see another round of Treasury purchases. But Dales says the Fed could pledge to hold on to the Treasurys and other assets it has already bought for “an extended period.” Such a move could soothe investors temporarily because it means the Fed won’t flood the market with assets to sell. But such a move likely wouldn’t be a significant boost to the economy.