Wall Street was buffeted by volatility yet again Monday, surging higher even as investors wrestled with credit concerns ahead of Tuesday's Federal Reserve meeting.Investors have been searching for signs of where the economy and the markets are headed after the fractious trading of the past two weeks. In a day devoid of economic news and with few earnings reports, investors early in the session seemed to avoid making big bets, though stocks later gained steam after midday.
The move comes ahead of the Fed's meeting on interest rates Tuesday. Policy makers are widely expected to hold the benchmark rate steady at 5.25 percent; as usual, the greater concern is with the Fed's economic assessment statement. This time, investors will be looking to see what the Fed says about credit.
"I think a lot of it has to do with people sort of squaring up before the Fed on the short side, covering some shorts. I really wouldn't read too much into it," said Charles Norton, principal and portfolio manager at GNICapital, referring to the market's move higher and investors who sell stocks "short," betting that they will fall. Such investors can be forced to buy stock to cover their positions if they believe the market is poised to move higher.
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