Fed Causes Stock Market Rally

What is behind the big rallies of the stock market?

Average traders are saying that there is no recent news to justify the stock market rally on Tuesday. The rally is probably an effect of the Fed's very recent injection of over 150 billion dollars worth of capital into companies that play the market.

Where is that bailout money going? Much of it is being used to maintain executive perks and bonuses. Some of it is being hoarded as cash. That is why the Bush administration felt compelled on Tuesday morning to threaten companies participating in the bailout to invest those funds. The banks are not investing in the real economy. So the only other place for them to put the bailout money, besides hoarding it, is into the stock market. No wonder then that there was a rally.