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Taper seen as positive for economy, bad omen for bonds

The surprise decision by the Federal Reserve to slow down its bond buying program was greeted by markets as a sign the economy is improving, a longer term bearish omen for bonds but a positive for stocks for now.

"I think there's a general consensus that ... what the Fed is finally signaling is that the economy is doing better," said Bob Doll, Nuveen Asset Management chief equity strategist. "In 2014, the economy will be a bit stronger and a bit better."

The Fed's move to "taper" its bond buying by $10 billion was expected by some market participants, but many had expected the Fed to wait for more data, in January or March.