FOMC Minutes Put Markets In A Bad Mood

Includes: DIA, QQQ, SPY
by: Midnight Trader
  • Dow Jones Industrial Average down 48.59 (-0.38%) to 12,604.53
  • S&P 500 down 0.02 (-0.00%) to 1,341.45
  • Nasdaq Composite Index down 14.35 (-0.49%) to 2,887.98


  • Hang Seng Index up 0.12%
  • Shanghai China Composite Index up 0.51%
  • FTSE 100 Index up 0.01%

Stocks finished slightly lower for a fifth day, grinding down after minutes from the most recent Federal Open Markets Committee (FOMC) meeting provided little insight as to whether the Federal Reserve is ready to provide additional stimulus. Reasonably positive trade-gap and wholesale inventory data also did not inspire much confidence for investors today. Most industry sectors in the S&P 500 fell today, with the largest declines among shares of industrial and technology companies. Commodities were mixed, with crude rising about 2% after a bullish inventory report this morning.

Minutes of the June 19-20 FOMC meeting indicate only a handful of voting members this year backed additional asset purchases by the central bank to avoid another dip in U.S. economic activity. Only four Fed officials mentioned more quantitative easing in their individual forecasts, with two saying they supported more easing and two saying they would consider it. Several others said more action could be warranted if economic conditions deteriorated.

Stocks sold off soon after the minutes 2 p.m. ET release, with the Dow Industrial Index falling nearly 120 points, only to recover moderately. Investors increasingly have been looking for the Fed to make a move to pump up the American economy as the impact of slowdowns elsewhere in the world undercut domestic momentum.

Earlier today, the Commerce Department reported the US trade gap narrowed 3.8% to $48.68 billion, down from $50.60 billion the month before, but matching analyst expectations. Wholesale inventories also met analyst predictions, rising 0.3%, but trailed the 0.6% advance in the prior month.

Crude oil jumped nearly $2 to finish near $86 a barrel after the government said U.S. crude supplies fell for a second consecutive week, fueling hope that demand may be rising. Crude oil for August delivery settled $1.97 higher to $85.89 a barrel. August natural gas rose 12 cents to $2.86 per 1 million BTU. August gold fell $3.50 to $1575.90 an ounce while September silver rose 14 cents to $27.03 an ounce. September copper rose 5 cents to $3.45.


(+) OPTT, Inked a deal with Lockheed Martin (NYSE:LMT) to develop a 19 megawatt wave-energy project in Victoria, Australia

(+) QTWW, Received a $3.8 million purchase order from a global natural gas vehicle engine and systems developer

(+) IPT, Announce plans to open two new retail party stores in the Greater Boston Area


(-) HGG, Cut full-year sales, earning forecast; downgraded to Hold from Buy at Stifel Nicolaus

(-) DNDN, Downgraded to Underperform from Neutral at Bank of America/Merrill Lynch; price target was lowered to $6 from $13

(-) ERJ Backlog of firm orders has dropped to its lowest level in six years for Q2