An extension of the government’s Troubled Asset Relief Program (Tarp) and a large deal in the homebuilding sector sparked a rally in stocks on Wednesday, even as warnings on the health of the economy from the Federal Reserve threatened to erase the gains.
Minutes from the latest policy meeting showed Fed economists lowered their gross domestic product estimates for the second half of this year and 2010, saying: “Real GDP [is] expected to flatten out gradually over the second half of this year and then to expand slowly next year”.
