Stocks Tick Higher as Fed Meeting Begins

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

As the Federal Reserve began the first of a two-day meeting today, investors continued to bid stocks higher. As of 12:45 p.m. EDT the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up 38 points, or 0.25%, while the S&P 500 has risen 0.34% and the NASDAQ is 0.6% higher. Many believe the Fed will announce the start of a gradual drawdown of its bond-buying program tomorrow, but stocks are continuing to rise because the market has been preparing itself for this move for a number of months. Most investors feel that a small amount of Fed "tapering" is priced into the market and that the Fed will need to begin paring back its $85 billion-per-month bond-buying sooner than later so the economy can gradually learn to stand on its own.

Another date many investors are waiting for is Oct. 1, when the Obamacare health insurance exchanges open up for business. As we inch closer to that day, the Dow's health care stock, UnitedHealth (NYSE: UNH  ) , begins to fluctuate more and more. Yesterday the stock was up 0.85%; today it's down 1.18%. Investors clearly don't know whether the exchanges will be a good thing for the company. UnitedHealth has only joined a few of them, opting to sit on the sidelines in other states to wait and see how things play out. Shareholders of any of the health insurance companies should be ready for a few wild days leading up to Oct. 1.

Bank of America (NYSE: BAC  ) is down slightly, while JPMorgan Chase (NYSE: JPM  ) is flat, after the two passed the self-imposed stress tests they must take every year. All the major banks, including Citigroup and Wells Fargo, passed the test and increased their capital ratios, but some analysts have noted that the banks should have used higher interest rates in the long term to give a better picture of what many consider a more realistic scenario, and that may be one reason shares are underperforming today.

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