After The Close - Stocks showed little direction today against the backdrop of an ongoing two-day Federal Reserve meeting that ends tomorrow. At the end of the session, the Dow Jones Industrial Average and the NASDAQ were off nine points and six points, respectively. More broadly, the advance-decline lines tilted slightly to the downside on both the Big Board and the NASDAQ.

As usual, Wall Street has been pondering what the Fed’s next move will mean for stocks. At this point, the feeling seems to be that the central bank will either leave its $85-billion-a-month securities purchase program intact or taper it slightly, perhaps by $10 billion. A steeper reduction would likely not go over well with investors. Word of the actual decision should come out shortly after 2:00 p.m. EST Wednesday. Whatever the case may be, the thinking is that bond yields are probably headed higher in 2014.

With the vast majority of stocks not doing much, it was hard for individual issues to shine, but some did. Among the Dow-30 components, 3M (MMM - Free 3M Stock Report) and Boeing (BA - Free Boeing Stock Report) were among the best gainers, as those stalwarts raised their quarterly dividends very substantially.

Another winner was the stock of Williams Co. (WMB), as the pipeline operator has become the target of a pair of activist investors.

Also trading notably to the upside were the shares of KKR Financial Holdings (KFN), on word that KKR & Co. (KKR) would be taking over its speciality-finance affiliate in an all-stock deal. KKR Financial shares were up sharply on especially heavy volume.

On the down side, the stock of FactSet Research Systems (FDS) fell after the company took a cautious stance on earnings for the current quarter. In the same vein, Magellan Health Services (MGLN) shares declined sharply after the pharmacy benefits manager gave weak profit guidance for 2014. In addition, Sanderson Farms (SAFM) stock fell notably when earnings missed expectations. That was even though its bottom line jumped as chicken prices rose and feed costs fell.

Tomorrow brings the much-anticipated decision by the Fed as to its near-term policy direction. Also on tap are earnings reports from mainstream companies such as FedEx (FDX), General Mills (GIS), Lennar (LEN), Paychex (PAYX), and Oracle (ORCL). Indications are that it will be a more eventful session, especially after the Fed concludes its meeting. -Robert Mitkowski

At the time of this writing, the author did not have positions in any of the companies mentioned.


12:30 PM EDT - The U.S. stock market is trading lower today, after putting in a constructive session yesterday. As we pass the noon hour in New York, the Dow Jones Industrial Average is down 23 points; the broader S&P 500 Index is off six points; and the technology-heavy NASDAQ is also shedding 10 points. Market breadth indicates some underlying weakness to today’s session, as declining issues are outweighing advancers by about two to one on the NYSE and on the NASDAQ. Further, weakness can be seen across all of the market sectors. There are notable declines in healthcare issues, with weakness in the biotech names. Also, the energy sector is slipping, even as the price of oil is heading higher. While there are few pockets of strength to be found in the market today, some technology stocks, particularly the semiconductor names, are holding up well.

Technically, the S&P 500 Index found some support yesterday. Notably, the bulls moved in to buy stocks on weakness, as they have on so many occasions lately. Now, traders may be exercising a bit of caution, as the FOMC meeting is taking place, and an interest-rate decision and some remarks will be presented tomorrow. Many traders may still be looking for a holiday rally, even as the market has had a large run this year, and some fatigue seems to have set in. Upcoming remarks from the Fed may well act as the needed catalyst to move the market. Elsewhere, the VIX, now at 16.50, is moving a bit higher today, suggesting that traders are feeling some apprehension.

Traders received a number of economic reports this morning. For one, the Consumer Price Index was largely unchanged for the month of November, coming in as had been expected. Notably, inflation has been quite tame lately, but that may not play a large role in the Fed’s decision concerning its asset purchase program. Meanwhile, the NAHB Housing Market Index for December came in at 58, which was better than the prior month’s reading and ahead of expectations. Tomorrow, we will get a better look at the housing market, when monthly housing starts and building permits are released.

In the corporate arena, the earnings announcements have been limited this morning. However, transportation giant FedEX (FDX) is slated to release results tomorrow. Meanwhile, today, Boeing (BA Free Boeing Stock Report) stock is higher, as that company approved a share-buyback plan. Also, Frontier Communications (FTR) is up, as that company is reported to be buying some business from AT&T (T- Free AT&T Stock Report). - Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.


Stocks to Watch from The SurveyThere is some earnings news out today. Notably, shares of FuelCell Energy (FCEL) are down sharply in pre-market trading, after the company, which develops and manufactures high-efficiency carbonate fuel cell technology for stationary electric power generation, reported disappointing October-period results. Too, chicken producer, processor, and distributor Sanderson Farms (SAFM) has reported October-quarter financials that fell short of our estimates, but were up significantly from a year earlier.

Elsewhere, shares of Frontier Communications (FTR) are indicating a sharply higher opening this morning, on news that the provider of voice, data, and Internet services has agreed to purchase industry peer AT&T’s (TFree AT&T Stock Report) wireline business and associated assets in Connecticut for $2 billion in cash. Finally, the stock of Boeing (BAFree Boeing Stock Report) is up modestly ahead of the bell, after the aerospace company increased its quarterly cash dividend 50%, to $0.73 a share, and added $10 billion to its share-repurchase authorization. – Matthew E. Spencer  

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

Before The Bell - The stock market, under pressure much of last week due to fears about what the Federal Reserve Board FOMC meeting, now about to get under way, would lead to, suddenly threw off those concerns and undertook a rally of some note yesterday. All told, by the close, the Dow Jones Industrial Average had jumped by 129 points; the NASDAQ was ahead by 29 points, which enabled that composite to rise further above 4,000; and the Standard and Poor's 500 Index was better by 11 points. The gains were strong throughout, as evidenced by the fact that advancers led decliners by two to one on the Big Board and by a bit more than that on the tech-laden NASDAQ.

The stock market also drove forward on the release of very strong news on industrial production. To wit, the Commerce Department reported at 9:15 AM (EST) yesterday that this metric soared by 1.1% last month. It was the biggest jump of 2013, easily eclipsing the expected increase of 0.6%. October's gain, meantime, had been a meager 0.1%. However, each month since August has now seen an increase, with this latest rise being the strongest gain during that period. Also encouraging was the fact that this report showed that industrial output was now above its prerecession peak. Additionally of note, the data on factory utilization, which accompanied this survey, saw an increase last month from 78.2% to 79.0%, buoyed by a modest uptick in manufacturing activity and a strong gain in utility usage. With cold temperatures blanketing much of the nation, we sense that utilities will be very busy this month as well.    

Meanwhile, investors threw off last week's caution about the Fed, as some investors are now sensing that the central bank will hold off on slowing the pace of its monetary expansion until early next year. Our guessing is that there is about a 50% chance that the Fed will act tomorrow when its concludes its FOMC meeting. Finally, investors were encouraged that yields in the fixed-income market eased back a bit. But this morning, the benchmark 10-year Treasury note is down slightly, with the yield inching back up a touch to just under 2.88%.

As for the Fed, it is getting ready to meet early this morning. It will, as noted, conclude its meeting, presumably the last over which Ben S. Bernanke will preside as lead bank Chairman at 2:00 PM (EST) tomorrow. Janet Yellen is expected to take over the helm of the Fed by next month.

As to other news, the markets in Asia were mixed overnight, while the bourses are tracking lower in Europe this morning. But on our shores, the Standard and Poor's 500 Index futures, the Dow futures, and the NASDAQ are all pointing higher with less than an hour to go before the start of the new trading day, as all eyes are on the Fed.

In conclusion, just moments ago, the Labor Department reported that the Consumer Price Index was unchanged last month, on a seasonally adjusted basis. And over the past 12 months, this key gauge of inflation at the retail level has been up by just 1.2%. Also, if we back out the often volatile food and energy components from the pricing report, to get the so-called core CPI reading, we find that the index was up just 0.2% for the month. That gain comes after three months in a row in which the core CPI was ahead a scant 0.1% each month. This increase in the core category, though, is really insignificant, as this metric has been in that 0.1% to 0.2% range for much of the past year.    

Overall, our sense is that the Fed will take little from the latest CPI data, as this report does not, in the least, change what remains a very favorable pricing environment.   – Harvey S. Katz

At the time of this article's writing, the author did not have positions in any of the companies mentioned.