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.