DOW - Don't fight the Fed. Once again it is proven true!

Dow

11,239.77

+429.92

+3.98%

Stocks saw its biggest one-day gain since May 2010 Tuesday after a wild market session as investors snapped up beaten-down stocks and following a Fed statement to keep interest rates near zero for at least two more years.


The Dow Jones Industrial Average soared 429.92 points, or 3.98 percent, to close at 11,239.77, after fluctuating heavily in the wake of the Fed decision. The Dow swung in a 640-point range during the session.


The S&P 500 rallied 49.84 points, or 4.45 percent, to finish at 1,169.30. The Nasdaq surged 124.83 points, or 5.29 percent, to end at 2,482.52.




The CBOE Volatility Index, widely considered the best gauge of fear in the market, plunged 25 percent.



The rebound comes after stocks sold off sharply in the previous session to log the worst day since the credit crisis in 2008 following S&P's downgrade of U.S.'s credit rating last week.

Volume was heavy again with the consolidated tape of the NYSE at 8.55 billion shares, while 2.41 billion shares changed hands on the floor.

Stocks initially swung in and out of negative territory after the Fed said it will keep rates low for "at least through mid-2013" and gave no further plans to spur economic growth.

“There’s a tug-of-war between vastly oversold conditions and the Fed statement,” said Sal Arnuk, co-On the other hand, we have fairly cheap equities.”manager of trading at Themis Trading. “It seems like the Fed doesn’t know what to do and they’re running out of clever ideas—that’s what pulled markets down.