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Minyanville's Market Recap: FOMC Minutes Help Surge


The markets were flat until the release of the FOMC minutes. Then the Dow and S&P hit record highs!


Stocks hit record highs after the release of the FOMC minutes. The Dow Industrials added +0.85% to close at 14,163, the S&P 500 added +0.81% to close at 1,565, and the Nasdaq Composite gained +0.59% to finish at 2,803.

Stocks were flat for most of the trading session until the release of the latest minutes by the Federal Reserve. Major indexes surged after the markets digested what caused the Fed to cut rates at its September 18th meeting. Investors concerns were assuaged when the Fed revealed that the cutting of rates of that magnitude "seemed unlikely to affect adversely the outlook for inflation." The Dow and the S&P 500 proceeded to spike to record highs.

Goldman Sachs (GS) had a notable performance as a result. Toddo noted on the Buzz that "Granny Goldman… staked her claim to leadership fame" as the stock surged to an all-time high. GS closed up +5.3% to $239.20. Other banks followed with Lehman Brothers (LEH) adding +2.8%, Morgan Stanley (MS) adding +1.6%, and Bear Stearns (BSC) adding +0.65%. Not everyone was pleased by the Fed's actions, however. Read Professor Katsenelson's The Cost of A Government Bailout as he reminds us of the consequences of the 2001 rate cuts. For another perspective of the health of our economy, read Professor Depew's daily column Five Things You Need To Know.

Elsewhere, in earnings news, Yum Brands (YUM) reported a better than expected quarter. The company, whose restaurants include Pizza Hut and Taco Bell chains climbed to an all-time high after beating analyst estimates. Professor Macke had expected good numbers from YUM as he noted on the Buzz yesterday. Read his thoughts on the joint ventures between Molson-Coors (TAP) and SAB Miller in Toasts and Thoughts. Also click here for Minyanville's Buzz Bits for more summaries that occurred on today's Buzz & Banter.

Commodities reversed their declines with crude gaining 1.4% to 80.14 per barrel. Metals were stronger as well. Gold added +0.72% to 744.20, Silver added +1.76% to 13.59, and Copper added +0.33% to 362.50.

On the radar for Wednesday, wholesale inventories data is due at 10:00 AM EST, and the weekly crude inventories report is set to be released at 10:30 AM EST. Click here for Minyanville's Trading Radar

Below is a recap of some of the idea flow on today's Buzz & Banter. Please note that stocks may appear in both bullish and bearish categories, due to long and short term trades by our many Minyanville professors.

Some bullish trade or investment ideas: DELL, MSFT, CYD, ATVI, BNI, GOOG, CPO, YHOO, RTI, AMGN

Some bearish trade or investment ideas: AAPL, PLCE, GOOG, AMZN, RIMM, CROX, NILE, FSLR, SPWR, QQQQ

Tomorrow's Wednesday. We know that excitement in you isn't just over the weekly petroleum report. We know it's over Hoofy & Boo's new video! See you bright and early. Have a great night!

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No positions in stocks mentioned.

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