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After the Close - Stocks rallied in a big way today when word reached investors shortly after noon that the Federal Reserve would be purchasing mortgage-related securities indefinitely. Wall Street was quiet, but slightly upbeat, in the morning, awaiting the decision by the nation’s central bank as to what its next move would be, as its two-day Federal Open Market Committee drew to a close.

As it turned out, the policy initiatives were much more aggressive than expected, as the Fed vowed to buy $40 billion worth of mortgage-backed securities a month for as long as it took for the labor market to improve materially. The Fed also indicated that it would extend its Operation Twist initiative through yearend and keep interest rates low through mid-2015. Previously, the central bank had said it would keep rates low through 2014.
  
At the close, the Dow Jones Industrial Average had gained 207 points and the NASDAQ was up 42 points. There were more than three times as many issues advancing than declining on the New York Stock Exchange, and the number of stocks hitting fresh 52-week highs swamped those falling to new lows.

Among the market’s sectors, it was a good day all around. Materials and energy stocks enjoyed a particularly strong session on the feeling that the Fed’s monetary easing would spur economic growth. Shares of companies in those sectors, such as Freeport McMoRan (FCX), Barrick Gold (ABX), and Dow components Exxon Mobil (XOM - Free Exxon Stock Report) and Chevron (CVX Free Chevron Stock Report) did very well as a result. Banking stocks also outperformed. Standouts there included JPMorgan Chase (JPM - Free JPMorgan Stock Report) and Wells Fargo (WFC). 

Tomorrow brings a raft of economic data that includes August data on retail sales, both including and excluding autos. Slight increases from July are expected in each case. Business inventories for July are also seen as rising, which can be taken as a sign that demand is rising. Some other data due out Friday may not be as upbeat, though. For instance, the consumer price index for August is expected to show inflation rising somewhat, month to month. Figures on industrial production and capacity utilization for August are projected to be flat to down, as well. And the University of Michigan consumer sentiment index is seen as moving sideways, at best. Overall, the market will have a tough time topping the big gains posted today, but some positive follow-through is not out of the question.  - Robert Mitkowski

At the time this article was written, the author did not have a position in any of the companies mentioned.

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2:30 PM ET - The major U.S. equity indexes, with an assist from the Federal Reserve—the central bank earlier today announced that it would launch a major new round of bond-buying, thereby extending the monetary assistance that it has given to the unimposing economic recovery since the financial crisis began in the wake of the rupture of the housing bubble in 2008—are pushing forcefully higher in mid-afternoon trading. The Dow Jones Industrial Average (up 180 points), the NASDAQ Composite, and the S&P 500 Index are each currently up more than 1% today. Advancing issues are outpacing decliners by more than a three-to-one margin on both the Big Board and the NASDAQ.

Since news surfaced that the lead bank will continue its aggressive monetary policy—to the tune of $40 billion in bond purchases per month—buying has been broadbased.  Each of the 10 major sectors are now well into positive territory. Not surprisingly, leadership is coming from those groups most closely tied to the performance of the global economy. In particular, energy and basic materials stocks are in high demand right now.

Meantime, it has thus far been a good day for those long commodities. The two most closely watched commodities, oil and gold, are higher, particularly the latter. A report from the Labor Department earlier this morning showing that producer (wholesale) prices rose 1.7% in August, likely prompted today’s gold rush. The precious metal is often sought in times when inflation appears to be on the rise. Meanwhile, other commodities that are on the upswing today include contracts for orange juice and rice.

Looking ahead to the last few hours of trading, it appears that it will take a lot to rain on the bulls’ parade. Recent trading activity would suggest that investors were emboldened by the latest news from the Federal Reserve. Stay tuned.  - William G. Ferguson 

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

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12:30 PM ET - The U.S. stock market got off to a somewhat choppy start this morning, but is now heading higher. Traders are no doubt anxiously awaiting news from the Fed, and that may be responsible for some skittishness. At just past noon in New York, the Dow Jones Industrial Average is ahead 20 points (0.2%); the broader S&P 500 Index is up one point (0.1%); and the NASDAQ is adding on six points (0.2%). Market breadth is mixed, as declining issues are narrowly ahead of advancers on the NYSE. Further, the market sectors are also largely divided. There is strength in the consumer non cyclical and utility issues. But, this may suggest a lack of direction. Meanwhile, weakness can be found in the consumer cyclicals and the transports.

Technically, the S&P 500 Index has been testing the upper end of a recently established trading range at about 1,440. Trading volumes have improved lately, supporting the rally, and this is likely a positive indication. Notably, the market has come a long way in the past month or so, as there are numerous stocks hitting new 52-week highs, versus a much smaller amount at new lows. Also, the VIX at below 16 suggests a high degree of bullishness, and may even indicate that the market is getting overbought.

The markets overseas were mixed, and this too may be in anticipation of the news set to break here in the U.S. In Europe, Britain’s FTSE 100 put in a decent session, but Germany’s DAX was off slightly, with large losses on France’s CAC 40.

On our shores, there were a few economic reports released, but they are largely being overshadowed by the upcoming Fed announcement, due out at 12:30 PM (EDT). Things may not be getting much better on the employment front, as initial jobless claims for the week ended September 8th rose to 382,000, up from the prior week’s 367,000 level. The showing was also a bit higher than analysts had expected. Elsewhere, producer prices moved up a bit in August, indicating that some inflation may be starting to develop. However, this remains to be seen over a longer period of time.

In corporate news, Pier 1 Imports (PIR) stock is moving higher, after the retailer posted decent quarterly figures. Also, Pall (PLL) stock is advancing sharply, after the industrial company, issued a positive release. Actively traded issues rising in price include: Nokia (NOK), Sprint Nextel (S), Alpha Natural Resources (ANR), and Molycorp (MCP). Declining issues include: Halcon Resources (HK) and Morgan Stanley (MS). - 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 Survey The Federal Reserve is undoubtedly on the forefront of investors’ minds today, though there is some corporate news worth keeping an eye on. Looking at earnings, shares of Pall Corp. (PLL) are trading nicely higher in the premarket, after the leader in the fields of filtration, separation, and purification released July-quarter results and an outlook that pleased Wall Street. Additionally, the stock of home-goods retailer Pier 1 Imports (PIR) is indicating a modestly higher opening this morning, due to solid August-period results and an upbeat near-term forecast. In other news, shoe retailer DSW Inc. (DSW) has announced a special dividend in the amount of $2 per share, payable on October 26th. – Matthew E. Spencer

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

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Before The Bell - Wall Street largely marched in place yesterday, with just a slight tilt to the upside, as investors cheered the long-anticipated release of Apple's iPhone 5 and a ruling by Germany's high court that approved the euro zone's permanent bailout facility. Conversely, investors held back more enthusiasm for a rally as they awaited today's announcement after the conclusion of the Federal Reserve's latest FOMC meeting.

Expectations are high that the lead bank will press ahead with yet one more round of quantitative easing, or massive bond purchases as a way to push long-term interest rates down even further. The Fed will issue a statement at 12:30 PM (EDT) this afternoon. Then, some 90 minutes later it will release economic forecasts relating to GDP and inflation. Finally, at 2:15 PM (EDT) Fed Chairman Ben S. Bernanke will hold a news conference to presumably explain why he is acting or not acting in regard to further stimulus at this time. Investors may well be on edge until that conference and the earlier releases.

As for yesterday, the markets, as noted, did little, with the Dow Jones Industrial Average barely adding 10 points. Still, that 30-stock composite did rise to another multi-year high, as the did the Standard and Poor's 500 Index, which added three points. The NASDAQ, boosted by a late gain in the shares of the aforementioned iconic tech stalwart Apple, rose by almost 10 points, but did not set another yearly high.

As for economic news, there was little of that yesterday. However, the business beat picks up today and tomorrow, with just-issued data on weekly jobless claims and producer prices. Specifically, layoffs rose more sharply than forecast in the latest seven-day stretch, rising from last week's upwardly revised 367,000 (originally estimated at 365,000) to 382,000. Continuing claims, however, dropped by 49,000. At the same time, inflation stepped up its pace notably, with the Producer Price Index surging by 1.7% in August. A gain of 1.0% had been the consensus expectation. The rise in the PPI, the largest monthly increase in that series in some four years, was mostly occasioned by surging energy prices. Excluding the volatile food and energy components from the mix, leaving the so-called core PPI, we find a much more controllable increase of 0.2% last month. However, even that gain was twice the forecast increase. So, there seems to be a budding inflation problem in place--at least for this month. In July, by comparison, the PPI gained just 0.3%. But the core rate of the PPI rose by 0.4% that month.

As for the rest of the week, we will get a series of key reports tomorrow, with the now-more closely watched companion inflation report on consumer prices being issued tomorrow morning at 8:30 (EDT). Also tomorrow, we will be getting data on retail sales, industrial production, and factory usage, as well as consumer sentiment from the University of Michigan. None of these issuances, save perhaps for the retail sales metric, is likely to prove especially welcoming, as the economy labors along at a dispiriting rate of improvement.

As for the stock markets around the globe, they were generally lower overnight, except for Japan's Nikkei, which gained some ground. Stocks, meantime, were lower on the Continent, with both the Paris CAC-40 and the Frankfurt DAX shedding ground. Our futures, meantime, are little changed ahead of the trading day that will commence in about a half hour from now. – Harvey S. Katz    

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