I'm not sure either. Stocks went down from 2:15 to 3:00, when I left for a meeting. I got back to my office around 5PM and the market was up 400 points.
I read the statement. It says the economy is getting worse (duh), and we'll probably keep ZIRP for at least two years (duh, did anyone think he was going to raise rates?). That's it. No mention of QE3 except to say that they were keeping their options open. Am I missing something? Why did the market rally so hard? I've a feeling it could have been bogus, but who knows.
It may well be bogus, however, once the turmoil settles out, stocks like extended low rates, and stocks with substantial sales overseas like a lower dollar. There are a lot of stoicks out there with solid balance sheets, good earnings, and yields higher than Treasuries. As bond yields fall this makes these stocks relatively more attractive.
I agree with that longer term view. I think we were just talking about the weird run up in the last hour, which seemed to have no obvious catalyst since the market was already expecting "extended low rates". Anyway, the market is already taking some of it back.