S&P 500 Surges to Record on Fed Stimulus Bets

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Oct. 17 (Bloomberg) -- U.S. stocks rose, sending the Standard & Poor’s 500 Index to a record, as speculation grew that the Federal Reserve will maintain the pace of stimulus after Congress ended the budget standoff. Bloomberg's Trish Regan, Alix Steel, Adam Johnson and BofA Merrill Lynch's Ethan Harris comment. (Source: Bloomberg)

Washington needs to get out of the way.

We have been talking about how the dip was the theme.

In the morning, a lot of technical analysts saying, we might need a pause here.

We are so far overextended in the s&p. maybe it's time to take some profits.

We did not see that materialize.

The rally was very broad-based.

Telecom, utilities, consumers.

All of those up over 1% in the s&p. you wonder whether the market really is extended.

You are an economist.

I think we need to keep in mind that the longer run outlook here, we are in a market that has been driven by fed liquidity, and a fed telling us they're going to with draw liquidity only when we get strong growth.

To me that means there should be a reasonable handoff between liquidity driven and growth driven markets.

I think we should still be optimistic about stocks.

You can make the argument that stocks are completely ignoring what was happening in d.c., to some extent.

When i talked to a lot of people, they say the fed is going to be in there.

The budget debate still going to happen.

We will still have the fed in the market periods.

They need to hold off on tapering talk because they don't know how the economy.. is doing -- is doing.

Obviously the fed's backstop is very important.

If the fed had tapered at their september meeting and then we got hit with the shutdown, there would not have been that strong sense that the fed is there for a backstop.

Maybe the fed got lucky here.

They did the right thing.

Ethan was one of the only economists, maybe the only economist on the street to get this one right.

You did not foresee the fed tapering.

Was it because of washington?

That was a big part of it or it everyone focused on september -- it.

Everyone focused on september.

We have a big debt debate in washington.

Why not wait?

They did the right thing.

They did need to telegraphic, perhaps, a little better -- telegraph it, perhaps, a little better.

I will take a victory lap, even.

We want to get to google with its third-quarter earnings

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