S&P 500: +7.00 (+0.66%)
The S&P 500 made new 2009 highs immediately following the release of the Fed statement, but stocks continued their early day move lower. The Fed reiterated the October end of its Treasury purchase program and extended purchases of mortgage-backed securities to the first quarter of 2010. The announcement showed that the Fed intends to exit the market, but wants to give the markets time to adjust to their exit.
Crude oil dropped 4.89% on the New York Mercantile Exchange (NYMX) after a U.S. Energy Department report showed an unexpected increase in stockpiles as refineries idled units for seasonal maintenance and fuel demand dropped. Energy and Material shares were the worst performing sectors, excluding Financials. Adding pressure to commodities was the U.S. dollar, which rebounded from new 2009 lows to finish the day with a small gain.
The only sector to finish in the black was Telecom, led by AT&T’s (T) 2.38% gain. A buy recommendation from Jim Cramer (of all things) pushed AT&T’s shares higher as Cramer said the company offers a “nice, safe” way of making money off the rise in the mobile Internet market.
Dell (DELL) shares moved higher for the first time since announcing their acquisition of Perot Systems. The acquisition left investors scratching their heads for several reasons, which I will detail on the blog hopefully by tomorrow.
Something to chew on while waiting for tomorrow’s post: Hewlett-Packard (HPQ) shares are cheaper on a price-to-earnings basis despite higher profitability, more diversified and stable revenue sources, and greater market share in the markets they serve.
Quick Hits
- Bullish Wall Street Estimates Fail to Keep Up With S&P 500 for First Time
- Fed Says Mortgage-Backed Purchases Will Slow, Sees Economy Strengthening
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Peter J. Lazaroff, Investment Analyst
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