By Patti Domm
The Fed in the week ahead is widely expected to pull the trigger on a new easing program, as the European debt crisis continues to boil.
The housing market will also be a focus when new and existing home sales data is released Tuesday and Wednesday. New data this past week showed a jump in foreclosure starts, signaling that a big wave of foreclosed properties will hit the struggling housing market early next year.
The Dow and S&P 500 had their best week since July and second best week since July 2010, as European officials showed support for Greece. The Nasdaq did even better ? jumping 6.3 percent, for its best week since July, 2009.
Market expectations are high that the Fed will announce a new program ? dubbed "operation twist" ? at the end of its two-day meeting Wednesday.
"Twist" is different than the much larger scale "QE2" quantitative easing program which involved the purchase of $600 billion in Treasury securities. Fed watchers expect this program to raise the duration of the securities the Fed holds, not the amount. The program, in theory, could reduce long-term interest rates as the Fed buys more securities in the middle and longer end of the yield curve.
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