Relief Rally Sweeps Walls Street Amid Massive Volatility

Tuesday was another stomach churning day on Wall Street. When the dust settled, the major averages had made dizzying gains after one of the worst sell-offs in history on Monday. Trading was relatively muted ahead of today's FOMC statement - after it was released things got crazy. The Fed essentially said that the economy is weak, will likely continue to be weak, and that rates will remain exceptionally low through at least mid-2013. There was no mention of more quantitative easing. The market initially tanked, with the Dow trading down as many as 200 points, and safe havens such as gold, Treasuries, and Swiss Francs soared. The trend reversed itself heading into the close, and in the last half hour of trading, stocks went parabolic. The Dow closed 430 points higher at 11,240. The widely watched blue-chip index traded in a massive range between 10,604 and 12,444. The SPDR S&P 500 ETF (NYSE: SPY) surged 4.65% to $117.48. Volume was absolutely insane once again. Around 691 million SPY shares traded hands compared to a 3-month daily average of 217 million. The SPY is down 6.58% in 2011. The PowerShares QQQ Trust ETF (NASDAQ: QQQ), which tracks the performance of the Nasdaq 100, jumped 4.82% to $53.03. Volume was well over 3 times the daily average on the Q's. The ETF is now down 2.63% year-to-date. Crude oil tanked for much of the day, but rallied along with the broader market. NYMEX crude futures added 0.54% to $81.75. The United States Oil Fund ETF (NYSE: USO) added 0.35% to $31.62. Gold soared for much of the session, before pulling back in the afternoon. COMEX gold futures gained 1.60% to $1,740.60. The SPDR Gold Trust ETF (NYSE: GLD) added 0.89% to $168.61. Treasuries were also unbelievably volatile on Tuesday. After making a parabolic move higher in the wake of the FOMC statement, Treasuries plunged into the close, but remained in positive territory. The iShares Barclays 20+ Year Treasury Bond ETF (NYSE: TLT) gained 0.30% to $105.87. The yield on the 10-Year Note fell 6.9 basis points to 2.25%. The U.S. Dollar fell on the day. The PowerShares DB US Dollar Index Bullish ETF (NYSE: UUP), which tracks the performance of the greenback versus a basket of foreign currencies, lost 0.85% to $21.07. The closely watched EUR/USD pair is currently trading at $1.4374.