Market Summary

Wall Street wasted no time in recovering from yesterdays losses. With the Federal Reserve releasing their statement in the afternoon, traders got in and early anticipating the FOMC’s stance on monetary policy, the state of the economy, and their handling of emergency loan programs.

Stocks finished sharply higher on light volume. The blue chips rose 120.16, or 1.3 percent, to 9,361.61, while the Standard & Poor’s 500 index advanced 11.46, or 1.2 percent, to 1,005.81. The Nasdaq composite index gained 28.99, or 1.5 percent, to 1,998.72. All three major averages lost over 1% on Tuesday, their largest declines in over a month.

U.S. crude settled up 71 cents at $70.16 a barrel on the NYMEX as global stock markets posted a broad rally. This is in despite the EIA report showing U.S. crude oil inventories rose 2.5 million barrels in the week to Aug. 7, well over analysts’ expectations for a 700,000 barrel build. In addition, the agency forecast for global oil demand growth will be lower in 2010 than previously expected, with little evidence a recovery is under way yet.

FOMC Sees Economy Leveling Out

The Fed said it would gradually slow the pace of its program to buy Treasury securities so that it will shut down at the end of October, versus September. The program is aimed at lowering rates on mortgages and other consumer debt, a move to spur Americans to spend more. So far, the fed has bought $253 billion of the securities, near its goal of $300 billion.

When it comes to lending rates, the committee pledged to keep target rates at record lows for an extended period of time. Currently, the fed funds target range is between 0 and 0.25%. Low rates should help money flow through the economy more freely as the credit markets loosen up, boosting borrowing on the consumer and business side as the prime rate stands at approximately 3.25%.

Macy’s Rises After Earnings, Outlook

Macy’s (M) earned $7 million, or 2 cents per share, in the quarter ended Aug. 1. That compares with $73 million, or 17 cents per share, in same period last year. Revenues were $5.16 billion, down almost 10 percent from a year ago, slightly below analysts’ forecasts of $5.18 billion. Macy’s same-store sales, or sales at stores opened at least a year, were down 9.5 percent.

The Cincinnati-based chain also boosted its full-year profit outlook as it benefits from the cost-cutting, but the expected range of 70 cents to 80 cents per share is mostly below average analyst estimates of 79 cents per share.