- Commentary -

August 13, 2009 (FinancialWire) (By Philip Holmes) — Stocks ended higher on Wednesday as investors took in news that the Fed wasn’t planning any sudden moves on interest rates, but nonetheless signaling that the economy is on the mend. Goldman Sachs (NYSE: GS) agrees, and now predicts an annualized 3% growth rate for U.S. economy in the second half of 2009.

The Dow Jones industrial average finished closed at 9,361.61 on Wednesday, up by 120.16 points, while the Standard & Poor’s 500-stock index rose 11.46 points, to end the trading session at 1,005.81. The Nasdaq composite index gained 28.99 points on the day, to finish at 1,998.72.

All eyes were on the Federal Reserve policy making committee, which wrapped a two-day meeting on Wednesday. Economists expected an upbeat, yet cautious message, and Bernanke and company delivered.

After offering the headline news that, “Economic activity is leveling out” in it’s post-meeting statement, the Fed said it would hold its main rate target at around zero, while scaling back on debt buying in stepped-up open market operations that have been unprecedented.

Inflation will remain subdued for some time, according to the statement, since recovery will be slow and unemployment will remain high for at least the next year. There will be no panicked tightening of monetary policy.

According to the New York Times, the Fed will end a program to buy $300 billion worth of Treasury bonds by the end of October, but will continue with its plan to buy $1.25 trillion in mortgage-backed securities.

Steady as she goes. The Fed isn’t extending its emergency measures, but is continuing to prime the liquidity pump and offer relief to financial institutions that still hold massive amounts of toxic real estate-related securities.

The FirstAlert(tm) Economics Calendar lists Import/Export Prices for July (8:30 a.m.), Retail Sales for July (8:30 a.m.), Weekly Initial Jobless Claims (8:30 a.m.), Business Inventories for June (10 a.m.), Treasury auctions 30-year bonds (1 p.m.).

The FirstAlert(tm) Events Calendar showcases ACM, FWLT at UBS Engineering & Construction One-on-One Conference; ATV Annual General Meeting; HOLX, ROVI, THOR, TSYS at CanaccordAdams Global Growth Conference; MDCI Shareholders Meeting; MF Shareholders Meeting; NYX, BRY, APC, NOG at EnerCom Incorporated Oil & Gas Conference; QSII Shareholders Meeting; RHT Shareholders Meeting.

FirstAlert(tm) “Money Index” is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ/AMEX 25 Most Actives and NYSE/NASDAQ/AMEX greatest Percentage Losers and Percentage Winners (weighted against pure monetary loss/gain) indicate the direction in which the mass of money is flowing, as well as the general focus of the market Of the Most Actives, last session’s trading showed 20 advancers versus 5 decliners. Volume leaders were led by Citigroup, Inc. (NYSE: C) trading 145,694,500 shares closing at $3.98 (up 7.9%), PowerShares QQQ Trust Series 1 (NASDAQ: QQQQ) trading 54,910,700 shares closing at $39.87 (up 1.6%) and the SPDR Trust ETF (NYSE: SPY) trading 51,158,785 shares closing at $100.80 (up 1.1%). Of last session’s Greatest Percentage Losers, stocks taking the greatest monetary losses were led by Barclays PLC (NYSE: BCS) trading on volume of 26,000 shares (losing $5,989.0 million), Clearwire Corporation (NASDAQ: CLWR) trading on volume of 2,021,582 shares (losing $1,085.8 million) and Sara Lee Corp. (NYSE: SLE) trading on volume of 6,996,700 shares (losing $751.3 million). Of last session’s Greatest Percentage Winners, stocks making the greatest monetary gains were led by Progen Pharmaceuticals Ltd. (NASDAQ: PGLA) trading on volume of 800 shares (gaining $12.3 million), SeraCare Life Sciences, Inc. (NASDAQ: SRLS) trading on volume of 122,725 shares (gaining $11.2 million) and Emmis Communications Corp. (NASDAQ: EMMS) trading on volume of 387,086 shares (gaining $19.3 million).

The statistical source for deriving each day’s The FirstAlert(tm) Money Index is StockSmart.com (http://www.stocksmart.com/ri/mostactive.staticdoc).

FirstAlert(tm) Website of the Day: http://www.lefthandersday.com/index.html

Quote of the Day: “Television has done much for psychiatry, by spreading information about it as well as contributing to the need for it.” Alfred Hitchcock

Today is: International Lefthanders Day.

Happy Birthday: Goldwin Smith, Annie Oakley, Bert Lahr, Alfred Hitchcock, Ben Hogan, George Shearing, Don Ho, Mudcat Grant, Danny Bonaduce.

Today in History: According to the Lounsbury correlation, the Maya calendar started in 3114 BC. Harry Brearley invented stainless steel in 1913. In 1918, Opha Mae Johnson was the first woman to enlist in the United States Marine Corps. Hurricane Charley, a Category 4 storm, struck Punta Gorda, Florida, in 2004 and devastated the surrounding area.

[FirstAlert(tm) was created by Gayle Essary, founder of Investrend Communications, Inc., parent of Investrend Information. The opinions expressed in FirstAlert(tm) do not necessarily reflect the opinions of Investrend.]

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