In a case of buy the rumor, sell the news, investors exited their positions quicker than you could say "sell" following the Federal Open Market Committee's meeting on lending rates.
As expected, the Federal Reserve will be targeting historically low lending rates near 0% moving forward, but it did note that it sees diminished downside risks. This leaves the door open for an eventual paring back of the Fed's monthly $85 billion bond-buying program and could actually pave the way for an interest-rate increase.
Today's news is really a Catch-22 for investors. On one hand, the Fed is remaining accommodative in its target lending rates and is pointing toward a stronger economy. On the other hand, though, a stronger economy will remove the need for QE3 and low interest rates, which are the primary factors supporting this stock market rally.
All told, the S&P 500 (SNPINDEX:^GSPC) sank 22.88 points (-1.39%) to close at 1,628.93. Despite a wild day in terms of volatility, three companies managed to calm investors' nerves by moving decisively higher.
Leading the index higher was software and cloud company Adobe Systems (NASDAQ:ADBE), which added 5.6% after reporting strong second-quarter results. For the current quarter, Adobe added 221,000 new cloud subscribers despite reporting a 10% decline in revenue to $1.01 billion and a decline in adjusted-EPS to $0.36. Looking ahead, Adobe is forecasting that its third-quarter cloud subscriptions should be at least as much as, if not more than, what it brought in during the second quarter. While Adobe's cloud software is crucial to its growth, I think the valuation here may be a bit out of whack and would suggest sticking to the sidelines as Adobe continues its transition.
Shares of graphics chip and processor maker NVIDIA (NASDAQ:NVDA) -- which I recently highlighted as a great dividend you can buy right now -- advanced 3.1% after announcing plans to license its graphics technology. Specifically, NVIDIA plans to license its Kepler architecture, which could give it a way to get into America's best-selling smartphone and tablet, made by Apple (NASDAQ:AAPL). What will be interesting is to see if Apple will bite, given that it designs its own processor technology for the iPhone and iPad. However, without the need to use the entire processing system, companies like Apple could pick and choose what they want to license, giving both companies a potential win-win scenario.
Finally, tire maker Goodyear Tire & Rubber (NASDAQ:GT) added 2.1% following a positive mention from CNBC commentator Pete Najarian. As always, I would suggest looking beyond the fleeting opinions of analysts and instead focus on the long-term outlook for Goodyear, which I'd say is strong. If we see even the slightest rebound in European tire demand, Goodyear could soar. Rubber prices have remained well off their highs, and Chinese demand should only increase from here on out. If I were you, I'd add Goodyear to my Watchlist.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
The Motley Fool owns shares of, and recommends, Apple. It also recommends Adobe Systems and NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.