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Federal Reserve Board Chairman Ben Bernanke testifies during a hearing before the House Financial Services Committee July 13, 2011 on Capitol Hill in Washington, D.C. - 

Jeremy Hobson: The market is where we'll start with Richard Dekaser, who is an economist with the Parthenon Group and he's with us live from Boston as he is every Wednesday. Good morning.

Richard Dekaser: Good morning.

Hobson: So Richard, everyone is attributing this big 300 point jump yesterday in the Dow to excitement about what Fed Chair Ben Bernanke's might say on Friday. What exactly are people waiting for him to do?

Dekaser: Well, you know, a little background first, Jeremy. It was exactly a year ago, at the same conference -- Jackson Hole, Wyo. -- Fed Chariman Bernanke spoke about policy options or tools in the tool kit that he could use if the economy were to weaken. And included among those was buying more government securities. And low and behold, two months later they did exactly that in what we now call "quantitative easing"...

Hobson: Quantitative easing -- QE2.

Dekaser: Right, so the speculation is that that's going to happen again. Of course, there's absolutely no evidence to suggest that he is going to do that, and in fact, there's some evidence to the contrary. But, nonetheless, it's that hope that really juiced the markets yesterday.

Hobson: Alright well Richard, when we hear that the market jumps 300 points on Bernanke, or drops x number of points because on this or that, how often is that actually the reason for the jump and how often is it just a guess?

Dekaser: Short answer: usually, but not always. There's two schools of thought on this. Fundamental analysis basically says the stock market is a big assimilation mechanism, and information flows in and prices respond accordingly. But that's not always the case. There's another school called technical analysis which says that there can be factors behind the scenes which aren't well understood that often influence prices. But it just doesn't make for a good explanation.

Hobson: Alright Richard, I just want to tell you before we let you go -- I got a listener email to marketplace.org from a guy named Jim Sinski down in Groveton Texas. He says to be more positive, instead of saying the market is down 280 points, we should just say stocks are on sale, 15 percent off.

Dekaser: That would definitely be an optimistic interpretation. And there are a lot of people who agree with him.

Hobson: Richard Dekaser, economist with the Parthenon Group, thanks so much.

Dekaser: My pleasure, take care.