Market Summary

Stocks rose in the pre market after upwardly revised growth projections, and stayed positive most of the day until the 2:15 conclusion of the June FOMC meeting led by Chairman Bernanke. The fed, in a very difficult position didn’t quite give the market the added jolt some traders were looking for; despite their language that the recession is easing. For the time being, the green shoots of recovery will be allowed to mature freely, with a steady as she goes attitude.

The Fed also didn’t say it would increase its purchases of treasuries or other kinds of government debt, disappointing some investors who had hoped for more. The Fed has said it would buy $1.25 trillion in mortgage-backed securities and $300 billion in Treasury securities in an effort to stimulate the economy by keeping borrowing rates low. However, many feel additional measures would cause inflation worries that would have an adverse effect in the bond market, sending borrowing costs higher.

Stocks started the day sharply higher after the Commerce Department reported that Durable Good Orders rose 1.8%, compared to expectations of a 0.9% decline. It was the 3rd gain in 4 months for the report. However, new home sales fell 0.6% in the month of May, disappointing the market like the existing home report the day before.

By the closing bell, the major indices finished mixed on the day. The Dow Jones industrial average fell 23.05, or 0.3%, to 8,299.86. The Standard & Poor’s 500 index rose 5.84, or 0.7 percent, to 900.94, and the Nasdaq composite index advanced 27.42, or 1.6%, to 1,792.34. The Russell 2000 index of smaller companies gained 5.18, or 1.1%, to 494.95.

Despite the lackluster results, nearly 2 stocks rose for every 1 that fell on the NYSE.
Bond prices fell on the fed announcement, with the yield on the 10 year rising 6 basis points to 3.69%. Prices had been higher after strong demand on a $37 billion government auction.

Energy Prices Drop on Inventory Gains

Sun setting on high energy prices?

Energy prices fell following an EIA report showing that stockpiles of gasoline increased for the 3rd consecutive week amidst higher prices. Crude for August delivery lost 57 cents to settle at $68.67 a barrel on the NYMEX. In addition, gasoline for July delivery fell 5.07 cents to settle at $1.8425 a gallon. Hopefully these prices will be reflected at the pump in the near future! Maybe not…