Stocks opened higher today in front of the latest statement from the Federal Reserve. After the Fed released its statement the markets advanced aggressively. During the extended press conference the market surrendered all of its gains and closed flat on the day.
The Fed said they would buy longer-term Treasury securities at an initial pace of $45 billion a month after its operation twist ends at the end of the year. The Federal Open Market Committee held its Federal Funds Rate steady at 0-0.25%. There was an additional piece of guidance from the Fed on how long they will retain this accommodative stance. The Fed Funds Rate is likely to remain at these low levels until unemployment reaches the 6.5% level.
Miners started the day out strongly and held their gains through the close. The GDX closed up slightly less than 3%.
Healthcare was a strong sector today. Managed care stocks worked higher after Aetna gave guidance that was above expectations. Pharmaceutical stocks were weaker today after Eli Lilly gave some disappointing data about an Alzheimer’s drug trial.
Financials continued to be bought. The news from the Fed was positive for the mortgage sector. Several banks have recently announced restructurings, both here and in Europe, that have been favorably received by the market. There is hope that more companies will make similar announcements.
Commodities were stronger with precious metals, copper, and crude oil trading higher. Crude spiked higher and natural gas lagged.
As we get closer to a potential resolution over fiscal cliff issues industrials are moving higher. The resolution will ease concerns over future growth estimates. The reduction of those concerns led to buying in the industrial space today. Late cycle names like GE were particularly strong today. The recent rebound in projected growth and increased stimulus spending in China has also helped the sector.
Source: PFS Group
