Wall Street Holds Taps the Breaks Ahead of Federal Reserve Activity

Michael Teague |

Wall Street Holds Taps the Breaks Ahead of Federal Reserve ActivityEarly on Monday, the Dow and S&P touched new intraday highs before paring back to slight losses ahead of Fed Chairman Ben Bernanke’s mid-week appearance before congress’s Joint Economic Committee, during which he will likely be asked some very direct questions regarding the status and the direction of the Fed’s current quantitative easing policy.

Worries about what most see as the Fed’s inevitable drawdown of asset and bond purchases were rekindled last week, though investors were not worse off for it. Still, Wednesday will also see the release of the minutes of the latest Federal Open Market Committee meeting, and will be preceded by a number of talks given by voting members of the Fed’s board of directors.

Over the last few weeks, statements emerging from the Fed have all seemed to more or less back the continuation of fiscal stimulus for as long as the economy requires, though these claims are frequently accompanied by more cautious statements about the potential unintended consequences of the current stimulus policy, and talk of a drawdown in QE taking place as early as this summer.

The S&P 500 closed the day on a 0.07 percent loss to 1,666.29 points, with notable performances from First Solar Inc. (FSLR), who continued its streak with a nearly 10 percent advance to close at $54.93 per share. Solar stocks overall were pushed higher as a result of a strong earnings report from Chinese firm JA Solar Holdings (JASO).

JCPenney (JCP) recovered at least temporarily from its weaker than expected earnings last week, after Maxim research upgraded the company’s shares to buy. Shares were up 4.6 percent to $18.81 by closing. Oil and gas companies WPX Energy (WPX), Tesoro (TSO), Noble Corp (NB) and Apache Corp (APA) had gained nearly 4 percent or more on the day.

Meanwhile, the index was weighted by losses from software company Red Hat Inc. (RHT), down 4.18 percent to $52.69, Campbell Soup (CPB) down 3.67 percent to $45.80 on concerns about some aspects of earnings it released earlier in the day, and Comcast (CMCSA) was down 2.81 percent to $41.44 on high volume.

The Dow shed 0.12 percent, closing at 15,335.28 points, with only American Express (AXP), Alcoa Inc. (AA), and Chevron Corp. (CVX) making gains of greater than 1 percent. The index was pressured downwards by Merck & Co. (MRK), down 1.78 percent to $45.17, Coca-Cola (KO) down 1.44 percent to $42.35, Proctor & Gamble (PG) down 1.34 percent to $78.95, as well as high volume losses for Pfizer Inc. (PFE) and AT&T (T).

The Nasdaq also lost 0.07 percent to 3,496.43 points, as tech shares proved a significant factor, with Cisco Systems (CSCO) down 1.22 percent to $23.94, Facebook (FB) down 1.87 percent to $25.76, and NetApp Inc. (NTAP) down 1.72 percent to $37.19 on high volume.

Tesla Motors (TSLA) also ended its recent tear, dropping 1.70 percent to $89.94.

Shares for Apple (AAPL) were up 2.23 percent to $442.93, while Yahoo! (YHOO) gained only 0.23 percent to $26.58 even though the company announced its acquisition of social networking/blogging site Tumblr earlier in the day.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
AA Alcoa Inc. 9.65 -0.03 -0.31 8,539,671
AAPL Apple Inc. 113.03 0.15 0.13 17,697,777
APA Apache Corporation 59.41 -0.53 -0.88 2,445,020
AXP American Express Company 64.33 0.91 1.43 2,468,193
CMCSA Comcast Corporation Class A Common Stock 66.36 0.55 0.84 5,662,773
CPB Campbell Soup Company 54.74 0.16 0.28 1,007,700
CSCO Cisco Systems Inc. 31.60 0.53 1.71 10,817,732
CVX Chevron Corporation 99.09 0.31 0.31 4,435,424
FSLR First Solar Inc. 38.98 1.73 4.64 2,959,883
GK G&K Services Inc. 96.28 -0.14 -0.14 280,058
JASO JA Solar Holdings Co. Ltd. 5.97 0.04 0.72 295,871
JCP J.C. Penney Company Inc. Holding Company 9.53 -0.04 -0.42 7,968,378
KO Coca-Cola Company (The) 42.55 0.50 1.18 7,112,579
MRK Merck & Company Inc. (new) 62.65 0.50 0.81 4,019,795
NTAP NetApp Inc. 35.55 0.37 1.05 1,519,113
PFE Pfizer Inc. 33.84 0.20 0.59 10,737,879
PG Procter & Gamble Company (The) 88.49 0.64 0.73 47,450,396
RHT Red Hat Inc. 79.01 0.27 0.34 1,232,516
T AT&T Inc. 41.41 0.27 0.66 13,001,907
TSLA Tesla Motors Inc. 206.35 -2.64 -1.26 2,357,322
TSO Tesoro Corporation 83.01 1.16 1.42 1,156,966
WPX WPX Energy Inc. 11.51 -0.32 -2.71 10,752,448
YHOO Yahoo! Inc. 43.30 1.01 2.39 5,731,736

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