Despite much of the optimism that investors had in regards to the Federal Reserve announcement of a new round of stimulus or the highly discussed Operation Twist, stocks are edging slightly lower today ahead of central bank's decision. In fact, some market watchers believe that Wall Street has already priced in the impact of Operation Twist, where the Fed sell short-term securities to fund purchases of long-term bonds to keep rates low, and is actually hoping for additional stimulus initiatives to be announced by Fed Chief Ben Bernanke. Republican leaders have voiced their opposition to any additional stimulus by the Fed, but most economists believe that the U.S. central bank should operate outside of the political realm. With the housing market and unemployment rate stagnant with no signs of rebounding any time soon, more pressure has been put on the Fed to respond. The National Association of Realtors said home sales rose 7.7 percent last month, but mostly due to depressed prices from foreclosures. In financials, major banks all fell today as ratings service provider Moody's (MCO) downgraded Bank of America (BAC), Citigroup (C) and Wells Fargo (WFC). Commodities are holding steady with oil and gold prices staying mostly flat.
Major U.S. Stock Indices
DJIA: 11,383.04 (-0.22 percent)
S&P 500: 1,196.81 (-0.44 percent)
NASDAQ: 2,601.34 (+0.43 percent)
Russell 2000: 688.05 (-0.28 percent)
In other news:
- Why does everyone hate the Fed? [CNBC]
- Shares of HP (HPQ) jump after news that the computer giant is ousting its CEO. The same thing happened to Yahoo! (YHOO) last month. One more and we have a trend. [Marketwatch]
- Tired of holding up other ailing European economies, France and Germany are looking to shift some of that weight on financial firms, a plan that could end up doing more harm than good to the global recovery effort. [Economist]
- New content deal with Discovery Communications (DISCA) gives Netflix (NFLX) a much-needed win after a string of stinging losses in recent months. [WSJ]
- Nobody cares about the iPod anymore, not even Apple (AAPL). [Marketwatch]
Check back for more developments.
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