The Dow Trades Flat Ahead of the Fed

After posting strong gains yesterday, the major U.S. indexes traded largely flat ahead of the U.S. Federal Reserve announcement today regarding potential stimulus. Coming into midday, the Dow Jones Industrial Average (INDEX: ^DJI  ) posted a slight decline of 0.1%. Similarly, the Nasdaq and S&P 500 also sit largely flat, both dropping about 0.1%. Volatility posted a slight increase heading into the afternoon. The market's so-called "fear gauge," the VIX (INDEX: ^VIX  ) , rose just above 1% as of this writing.

What's driving the market
Simply stated, two words are driving the market today: the Fed. As mentioned earlier, the Federal Reserve is concluding its two-day monetary policy meeting. The past few weeks have painted a distinctly less rosy portrait of the global recovery, as growth in China and America appeared to have slowed and the fiscal situation in Europe looks bad and may be getting worse. As a result, markets have increasingly expected the Fed to provide additional monetary stimulus to buoy the U.S. economy in the short term.

Among Dow components, shares of consumer products giant Procter & Gamble (NYSE: PG  ) posted the largest decline, dropping over 3%. The company lowered its earnings forecast for both the current quarter and the entire year. The culprit? Softening demand in emerging markets and adverse foreign exchange impacts weighing on the blue chip's bottom line. Today's drop pushes P&G's dividend yield to nearly 3.8%, nearing mouth-watering levels. And while the short-term headwinds sound like negatives, they create a great buying opportunity for the long-term investor. We spell out all the reasons investors should love P&G as well as two other Dow dividend dynamos in the Fool's most recent research report. To find out which Dow dividend powerhouses look poised to thrive for years into the future click here to grab your free copy today.

Fool Andrew Tonner held no financial position in any of the companies mentioned in this article at the time of its publication. You can follow Andrew on Twitter at @Andrew Tonner. Motley Fool newsletter services have recommended buying shares of Procter & Gamble. The Motley Fool has a disclosure policy.
We Fools may not all hold the same opinions, but we all believe that
considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1918788, ~/Articles/ArticleHandler.aspx, 10/22/2016 9:21:36 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:47 PM
^DJI $18145.71 Down -16.64 -0.09%
^VIX $13.34 Down -0.41 -2.98%
Volatility S&P 500 CAPS Rating: No stars
PG $84.33 Down -0.60 -0.71%
Procter and Gamble CAPS Rating: ****