Without a doubt, the FOMC's two-day meeting occupied the minds of most
investors last week; however, one other piece of data did manage to garner
some attention. Consumer confidence remained relatively stable, and landed
ahead of economists' expectations. "Consumers have grown increasingly
optimistic over the last three months. The recent turnaround in the stock
market and an easing in unemployment claims should keep consumer expectations
at current levels and may signal more favorable economic times ahead," said
Lynn Franco, director of the Conference Board's consumer research center, to
Dow Jones Newswires. But the main event, which kept stocks at bay ahead of its
release, was the Federal Reserve's decision on rate cuts and its subsequent
comments concerning the economy. "It was pretty much like watching paint dry,"
said Angel Matta, head of trading at Legg Mason, to The Wall Street Journal.
"People were pretty inactive ahead of hearing from the Fed." However, all the
anticipation fizzled, and an anti-climactic mood took hold of stocks after the
central bank cut rates to 1%, their lowest level in 45 years. Although the cut
was widely expected and already priced into the market, the Fed's indication
that it had yet to see signs of sustainable growth in the economy, combined
with lingering deflation concerns prompted a sell-off in stocks. However,
fickle investors were quick to transcend the outcome of the FOMC's meeting and
swiftly embraced the recently cast-off chip issues. "The semi stocks are
strong and the rest of the technology sector is following that as it makes up
most of the Nasdaq," said Ray Rund, managing director and director of research
at Shaker Investments, to Reuters News. This week promises to be a quiet one
ahead of the long holiday weekend; a well needed rest for investors before a
decisive earnings season.
High-Tech Monday Update is provided courtesy of Thomson Financial. This
information is believed to be true and accurate; we take no responsibility for
inaccurate information and reserve the right to update our reports. For more
information, please visit our web site at http://www.thomsonfinancial.com.
SOURCE Thomson Financial
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