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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Markets Surging To Surprise Pre-Fed Rally

What gives?

The markets are supposed to be relatively calm in the hours leading up to a no-news Federal Reserve policy statement of the sort that's due out at 2:15 p.m. today.

But that's not the case today.

In the first 90 minutes of trading, the Dow has shot up 125 points, or about 1.4 percent, a real move.

The broader S&P 500 is up about 1.3 percent and the tech-heavy Nasdaq is up nearly 1.7 percent.

Bank stocks are doing well, as are -- as you can see -- tech stocks.

This has caught everyone by surprise. The Fed is widely expected to make no news this afternoon, leaving interest rates where they are.

Now, the Fed could prick this rally instantly if it says something the markets don't like, such as it's planning on raising interest rates sooner than traders expect. Or if the Fed lays out a specific exit strategy for its role in the recession.

Could this be proof of a bull market?

Or are the markets just happy that it looks like the Fed's going to leave things alone for awhile?

"I'm a little surprised of the run-up ahead of the Fed meeting," Peter Jankovskis, co-chief investment officer at OakBrook Investments, told the Associated Press.

There was some positive news from Toll Brothers this morning, as the luxe home-builder reported an increase in signed contracts for new homes -- the first annual increase in four years.

But that shouldn't be moving the market the way it is. Frankly, The Ticker wishes we had a better answer for you. We'll ride it out until 2:15 today and see what happens.

-- Frank Ahrens
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By Frank Ahrens  |  August 12, 2009; 10:57 AM ET
Categories:  The Ticker  | Tags: Dow Jones, Toll Brothers, nasdaq, s&p 500  
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Next: Fed: Rate Unchanged, Economy Stabilizing But Still Weak, Inflation To Remain Low

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