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The Dow Now: Calm Before the Fed Storm

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Disney and Kraft Foods are up on the day.

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MINYANVILLE ORIGINAL With an announcement upcoming from Ben Bernanke about whether or not the Fed will initiate a new round of quantitative easing, investors continue to hold their wait-and-see position, with the Dow Jones Industrial Average (^DJI) inching up 0.17% to 13,356.12 as of 11.59 a.m. EDT.

"We expect the FOMC statement to issue a strong verbal easing by pushing the fed funds exit guidance from 'late 2014' to either mid- or late-2015 -- or it may be more directly tied to economic developments," said Joseph LaVorgna, chief US economist at Deutsche Bank, according to The Street. "In addition, we also expect the Fed to announce another round of quantitative easing, which will likely include both Treasuries and MBS. Contrary to prior rounds of QE, we do not expect a fixed size or end-date to be announced, rather policymakers will pursue an adjustable, open-ended program, which will be modified as economic conditions warrant."

Coca-Cola (KO) is the among the biggest Dow gainers in midday trading, jumping 0.67% to $37.80 after announcing its plans for India. The beverage giant will realign its operations in Southwest Asia, taking India out and replacing it as a separate operating region. By 2020, Coca-Cola expects to spend $5 billion on the second-most populous nation in the world.

Kraft Foods (KFT) also moved up 1.05% to $39.99. The food company will trade ex-dividend on September 17 for its quarterly dividend of $0.29, which is payable on Oct 15.

Disney (DIS), another gainer on the day, hit another new 52-week high of $52.37. As of 12.01 p.m. EDT, it is up 1.26% to $52.35.

Only six of the 30 Dow components are trading negatively thus far. Microsoft (MSFT) slips 0.68% to $30.57. Earlier, Jefferies' Ross Macmillan initiated coverage of the tech company with a Hold and a $35 price target, saying that Microsoft faces strong challenges for the release of Windows 8:

PC users lose familiarity and are placed on a new learning curve, while tablet/ hybrid devices users must choose W8 devices over strong competitors. Other challenges include building the app ecosystem for the ARM platform and pricing devices competitively while maintaining the economics of the OEM model. We conclude that W8 could see a somewhat muted consumer PC cycle and increased share in tablets may come at the cost of some price compression.

Twitter: @sterlingwong
No positions in stocks mentioned.
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