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Stock Market Today Reflects Strong Reliance on FOMC Meeting

The stock market today opened on an optimistic note as worries abate about the Fed indicating an end to quantitative easing after this week's Federal Open Market Committee (FOMC) meeting.

Shortly after the opening bell, the Dow Jones Industrial Average surged 172.02, or 1.14%, at 15,242.20. The Standard & Poor's 500 Index soared 16.43, or 1.01%, at 1,643.16. The Nasdaq jumped 40.11, or 1.17%, at 3,463.67.

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Stock Market Today: Is the End of the Winning Streak the Start of Something Big?

All good things must come to an end...

A winning investment strategy since the start of the year has been to buy the dips. But that tactic may be changing in the stock market today.

In another rollercoaster session on Wednesday, U.S. equities fell as investors prolonged a recent selloff spurred by the unwinding of bullish bets.

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Stock Market Today: Will a Bad Earnings Season Spoil This Year's Gains?

Coming off the worst week of the year, market participants have a cautious stance in the stock market today as earnings season kicks off - and will likely disappoint.

The Dow fell 13.29 points, or 0.09%, to 14,565.25 last week. The S&P shed 15.91, or 1.01%, to end the week at 1,553.28.

Monday, guarded investors kept a wary eye on developments in Eurozone, nuclear tensions in the Korean Peninsula, and Alcoa Inc.'s (NYSE: AA) earnings after the bell-the unofficial kick-off to Q1 earnings reports.

Red flags are waving that companies will report a slowdown in corporate profits. A number of companies have delivered lower guidance, with pre-earnings announcements sloped to the negative side. Companies in the S&P are expected to increase Q1 earnings a measly 1.5% over last year, according to Thomson Reuters.

Weak earnings could push any nervous investors to take gains and bail on markets for a while.

"Right now, projections for earnings in 2013 and the market are based on optimistic assumption," Howard Silverblatt, senior index analyst with S&P Dow Jones Indices told Barron's. "We can meet estimates if things move in the right direction. But the economy does not go straight up or down. There are bumps up or down. There are bumps in the road. And investors rarely get everything they need or want."

Here are some upcoming earnings reports to watch, as well as two of the biggest deals moving stocks this week.

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It's Time to "Follow the Money" Into This Stock

If you’re looking for the very best profit plays in this toppy market, here’s my advice.
Follow the money.
There’s no "signal" more heartening than en masse insider buying - or finding out that big investments are being made by the handful of institutional players with a proven ability for finding big winners.
It’s even better when you see that the Big Boys are making those investments in stocks the rest of Wall Street wouldn’t even think of touching.
This “even better” scenario is just what’s happening with this natural resources play

Stock Market Today: Why Stocks Slipped After Seven-Day Rally

Best Investments Today

After a seven-day rally that produced consecutive record highs for the Dow Jones Industrial Average, the stock market today (Tuesday) took a breather.

In early afternoon trading, the Dow Jones Industrial Average was down 16.66 or .12% at 14,430.63. The Standard & Poor's 500 Index was off 4.94, or .32% at 1,551.37. The Nasdaq was lower by 16.30, or .50% at 3,236.

"We've just been going up and up and up every day, and now a slight pullback. There is nothing surprising here, by any stretch of the imagination-it's natural to get a little pullback like this," Sean Kelly, managing director at Knight Capital told The Wall Street Journal.

Market participants continue to closely watch the S&P 500 Index. The broad-based market benchmark is close to its all-time closing high of 1,565.15 hit on Oct. 9, 2007.

But investors may be getting a bit concerned about the recent bull run. After falling to a six-year low on Monday, the VIX (the market's fear index), rose 7.8% Tuesday.

Also, the current bull market is aging. It turned 4 on Saturday. Only five of the past 11 bull markets have made it to their fifth birthday, according to data from S&P Capital. The average bull market since 1932 has endured for roughly four-and-a-half years.

Not helping stocks Tuesday was a read from the National Federation of Independent Business. While the report showed its small business optimism index rose in February, exceeding expectations, the federation's reading on expected business conditions remained in deep recession territory. Moreover, business owners reporting declining sales far surpassed those reporting increased sales.

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Stock Market Today: Finally Some Gains After Two-Day Slump

After two days of losses, the stock market today (Friday) reversed the slide and opened higher, thanks to better-than-expected earnings from Hewlett-Packard Co. (NYSE: HPQ) and American International Group Inc. (NYSE: AIG)

Shortly before 1 p.m. on Wall Street, the Dow Jones Industrial Average was up 114 points to 13,994.62, the Standard & Poor's 500 Index added 10.6 to 1,513.02 and the Nasdaq advanced 25 to 3,156.34.

While all three indexes are on track for their worst week of the year, the Dow is still up some 6% since the start of 2013, the S&P 500 has gained 5% and the Nasdaq has tacked on almost 4% despite giving back all of February's gains during the two-day selloff.

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Stock Market Today: This Stock Wins With or Without QE3

The major headlines in the stock market today include the Fed's decision to implement QE3, increased producer prices, and higher jobless claims.

  • QE3 a 99% certainty?... Not quite- When the Federal Open Market Committee makes its statement at 12:30 p.m. EDT every investor will be waiting to hear if QE3 has finally arrived. After what seems like two years of speculation since QE2 was announced will we finally get QE3? According to Citigroup Inc. (NYSE: C) a gauge of indicators of market expectations for additional central bank stimulus rose to a record 99% in August. Yet many economists do not expect QE3 to be announced today for many reasons. If the Fed takes action it will be viewed as highly political coming just months before Election 2012. Even if the Fed announces QE3 but says it will delay QE3 purchases until after the election as it did with QE2, the political implications will still be there. Other reasons are the lack of progress the previous rounds of QE have had in turning around the economy - and not just the stock market. "The Fed continues to want the economy to grow faster and specifically, to grow more jobs, but the ability of QE to do that is extraordinarily limited," Catherine Mann, a finance professor at Brandeis and former Federal Reserve economist told CNN. "We know that QE reduced interest rates, but we also know that has not led to more construction, more mortgages, more business investment, or more lending. Since it hasn't done any of that, it probably hasn't created jobs either."
  • Producer prices rise most in three years- Wholesale prices, measured by the producer price index, climbed 1.7% in August - the most since June 2009 - due to higher gasoline and natural gas prices. This was a faster increase than the 0.3% reported in July and ahead of the median forecast for a gain of 1.3%. Food prices rose 0.9% due to a rise in dairy and egg prices. The core producer price index which excludes food and energy rose 0.2%, which was in line with expectations. Tomorrow's consumer price index will be a good indicator if higher wholesale prices have translated into increased consumer prices.

Click here to see what Zuckerberg revealed...

Stock Market Today: U.S. Credit Rating At Risk Again

The major headlines in the stock market today (Tuesday) include Moody's warning it might lower America's AAA rating, the trade deficit and a financial shakeup:

  • U.S. Credit Rating at Risk- In a statement released Monday, ratings agency Moody's said the United States is in danger of losing its AAA credit rating if Congress cannot come up with a solid plan to lower the debt-to-GDP ratio. "If those negotiations lead to specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term, the rating will likely be affirmed and the outlook returned to stable," Moody's said in an e-mailed statement. "If those negotiations fail to produce such policies, however, Moody's would expect to lower the rating, probably to Aa1."

    Currently Moody's rates the U.S. AAA credit rating with a negative outlook. Standard & Poor's last year downgraded the U.S. to AA+ which is the equivalent to Moody's Aa1. Both agencies cite the political bickering in Congress and inability to deal with fiscal situations as the main reasons for the downgrades. S&P has mentioned that those risks could lead to another downgrade. When President Obama updated his federal budget in August the debt-to-GDP ratio was projected to be 75% by 2022, currently it is just over 1.04%. If lawmakers decide to go off the fiscal cliff as a debt reduction measure Moody's said it will maintain its current rating and negative outlook and then wait to see results of the fiscal cliff before deciding to return to a stable outlook.

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Stock Market Today: This Tech Stock Rallies to All-Time High

The major headlines in the stock market today include Europe's latest rescue effort, cautious optimism on U.S. jobs, and these big-name stocks leading the rally:

  • ECB unveils unlimited bond buying plan- European Central Bank (ECB) President Mario Draghi announced in Frankfurt today (Thursday) that the ECB will embark on a drastic new bond-buying plan. The new program, called "Outright Monetary Transactions," allows the ECB to buy bonds with maturities between one and three years without announcing any limits in advance, as long as the government in question is under a program approved by the Eurozone. The plan is aimed at stabilizing interest rates in the euro area and will require countries such as Spain and Italy to request aid from the ECB to activate the bond purchases.

    "Under appropriate conditions, we will have a fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area," Draghi said at a press conference. "Governments must stand ready to activate the EFSF/ESM in the bond market when exceptional financial-market circumstances and risks to financial stability exist -- with strict and effective conditionality. The ECB reserves the right to terminate bond purchases if governments don't fulfill their part of the bargain." The ECB held its benchmark rate at its record low level of 0.75%. Draghi announced that the ECB won't claim the status of a senior creditor if the bonds it buys have to be restructured and that the purchases will be "sterilized" meaning there will be no impact on the monetary supply.

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Stock Market Today: Two Big Winners in Another Quiet Day

Here are the main headlines in the stock market today.

  • Home prices show strong improvement- The S&P/Case-Shiller National Home Price Index increased for the fifth month in a row as prices in June on a non-seasonally adjusted basis were up 2.3% from the previous year and ahead of expectations for a 2.2% increase. Home prices rose 6.9% in the three months ended June 30 compared to the first three months of 2012. The index, which measures single-family homes and covers more than 80% of the housing market in the United States, continues to back up the belief that the housing market has finally turned a corner. "We seem to be witnessing exactly what we needed for a sustained recovery; monthly increases coupled with improving annual rates of change," said David Blitzer, a spokesman for Standard & Poor's, in a statement. "The market may have finally turned around."
  • Consumer confidence falls to nine-month low- As worries over the economy escalate and more Americans are unemployed consumer confidence slipped to its lowest level since last November. In August, consumer confidence, measured by the Conference Board's Confidence Index, fell to 60.6 from 65.4. Economists had hoped the index would rise slightly to 66. The board's future expectations sub-index dropped to 70.7 from 78.4, while the present-conditions index was basically unchanged at 45.
  • Mario Draghi to skip Jackson Hole- President of the European Central Bank Mario Draghi was expected to be the keynote speaker Saturday September 1 in the second day of the Jackson Hole, WY Symposium. Draghi will not attend due to his heavy workload regarding the strategy of the ECB's new bond-buying plan. Details regarding the European Stability Mechanism and other measures to improve the Eurozone debt crisis are expected to be announced at the ECB's next meeting Sept. 6.

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Stock Market Today: Stocks Edge Higher To End the Week

Here are the major headlines in the stock market today.

  • Capital goods orders declines most in 8 months- Orders for core capital goods which excludes transportation and defense dropped 3.4% in July, the biggest decline since November. Capital goods such as computers, engines, and communication equipment are thought to be key indicator of business spending and this drop certainly does not inspire any confidence in the economy. "There's uncertainty domestically about the tax environment, and there's uncertainty globally about the outcome of the European crisis," Millan Mulraine, a senior U.S. strategist at TD Securities in New York told Bloomberg. "This is not engendering business investment and hiring." Economists had expected this category to rise 0.7% after a previously reported 1.7% decline in June.
  • Durable goods orders rise- Manufactured goods which are expected to last at least three years, increased 4.3% in July fueled by airline and auto sales. Economists had expected on average a 2.5% increase. Overall orders last month were lifted by a 14.1 % jump in transportation equipment as demand for civilian aircraft surged 53.9%. This was led by Boeing Co. (NSYE: BA) which had a strong performance at the Farnborough Air Show and received orders for 260 aircraft, up from 24 planes in June. Motor vehicle sales increased 12.8%, the largest increase since last July. Yet omitting the transportation sector, orders fell 0.4% and declined for the second month in a row.

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Stock Market Today: Waiting On Clues From the Fed

Here's what's making the headlines in the stock market today.

  • The FOMC will release minutes from its July meeting at 2 p.m. EDT- Even though further additional stimulus measures were not announced at the last meeting investors will try to decipher what was said for clues that QE3 could be on the way. Many economists think that the Federal Reserve could announce the measure at the Jackson Hole, WY symposium which takes place next Friday and Saturday Aug 31- Sep 1.

  • Bernanke announced QE2 in Jackson Hole in 2010 but investors may be disappointed this time around. "There's not going to be enough data for him to say anything new," Catherine Mann, a finance professor at Brandeis University and former Fed economist who has attended the meeting twice told CNN. "It's possible he will make some reference to slowing global growth, increasing headwinds from Europe, and the slowing of the economy as the consequence of uncertainty related to fiscal cliff."

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Investors Look to Fed to Stimulate Stock Market Today

After another round of mixed economic indicators was released this morning, investors are looking towards the Federal Reserve to rally the stock market today (Wednesday).

Private-sector jobs increased by 163,000 ahead of economists' expectations of 125,000, but down from last month's 172,000. If you remember, last month's number was thought to be a precursor to a great nonfarm payroll report but that number can in at an underwhelming 80,000 jobs.

Investors hope for 100,000 jobs added when July's U.S. jobs report is issued Friday.

Manufacturing continues to slow across the U.S. and overseas, with the latest data slipping from previous months:

  • The U.S Markit PMI index fell to 51.4 from 52.5 in June and the ISM reading was again below 50 with a July level of 49.8. This was the first time the ISM index has been below 50 since the end of the recession in mid-2009.
  • The United Kingdom's measure of manufacturing, Markit/CIPS Manufacturing PMI index, declined at its fastest rate in more than three years falling from 48.4 in June to 45.4 in July.
  • Manufacturing in the Eurozone fell to a three-year low of 44 and two different levels of China's manufacturing hovered around 50. Any reading below 50 signals contraction.
While many analysts do not expect the Fed to make drastic moves such as initiating QE3 the consensus is that they will take some form of action. This might be continuing the promise of lower interest rates through 2015 as opposed to 2014, and a strong hint at further stimulus in the near future.

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Tech Stocks Carry the Stock Market Today

The stock market is trying to hold on to gains for a third consecutive day as tech stocks lead today's charge.

Investors are trying to brush off jobless claims that increased from last week and existing home sales that fell to an eight-month low.

After financials held the earnings spotlight for a week tech stocks are starting to take over. For the most part they are keeping up the positive trend set by banks.

Intel Corp. ( Nasdaq: INTC) reported second-quarter results after Tuesday's close that beat market expectations and offered strong full-year guidance. Intel stock rose more than 3% in trading yesterday but is down slightly today.

International Business Machines Corp. (NYSE: IBM) reported after yesterday's closing bell and blew past the average earnings per share estimate of $3.42 when it announced EPS of $3.51.
Yet, revenue for the second quarter fell 3% from last year to $25.8 billion, missing analysts' forecasts of $26.3 billion.

The company cited the debt crisis in Europe as one of the main factors bringing sales down but issued a positive outlook for the remainder of the year. IBM raised its 2012 profit outlook by 10 cents, to $15.10, ahead of Wall Street's median forecast of $15.06.

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Stock Market Today: Will the Fed Finally Give In to QE3?

The stock market today opened flat awaiting minutes from the Federal Open Market Committee's (FOMC) June meeting that will be released this afternoon.

Prior to the release of the Fed minutes, Spanish Prime Minister Mariano Rajoy announced that Spain will work immediately towards more government efficiency and austerity. After yesterday's announcement by the Eurozone finance ministers to inject Spanish banks with 30 billion euros ($36.6 billion), Rajoy declared that Spain would cut 65 billion euros or almost $80 billion from its budget in less than three years.

Rajoy said this would be done through cutting public institutions and social welfare programs such as unemployment, plus raising taxes. These decisions come a day after Spain was given an extra year to lower its deficit.

The Federal Reserve will release its minutes around 2 p.m. today and everyone will want to know if QE3 is on its way.

For over a year now investors have pined over the prospect of the Fed lifting the markets, if only for the short-term, through more quantitative easing measures. As experts have proclaimed this action would simply be another "Band-Aid" for a beaten down market.

Money Morning's Chief Investment Strategist Keith Fitz-Gerald put the effects of additional stimulus very simply.

"It has never worked since the dawn of recorded time and it will not work now," said Fitz-Gerald. "You cannot debase your currency and work your way out of this for anything but a short-term basis."

With last week's underwhelming jobs reports and signs from corporate earnings and manufacturing that the economy is slowing further, it might be hard for Chairman Bernanke and the Fed to ignore the option of QE3 any longer.

If Bernanke continues to just hint at more easing that may not be enough to lift this struggling market.

In other domestic news the trade deficit shrank 3.8% to $48.7 billion led by lower crude oil prices, bringing imports down while exports held up well, increasing 0.2%. U.S. wholesale inventories rose 0.3% but these numbers did little to soothe investor's fears ahead of the Fed minutes.

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