Yesterday was turning into an OK day for the Dow Jones Industrial Average (^DJI 1.05%). Despite mixed news from the Producer Price Index and housing starts, the index was holding strong above 14,000 -- that is, until the Fed released the minutes from its most recent FOMC meeting. Then the Dow nosedived like a kamikaze, losing 108 points before the closing bell and another 56 points so far this morning.
The Fed's January meeting covered the current use of quantitative easing to stimulate the economy, with the aim of an increase in job creation. What the minutes revealed was a concern by officials that the cost of the current QE policy is too great and that the Fed may have to slow its current bond repurchase program before the hiring boost it was intended to deliver arrives. Members of the meeting also worried that the "easy-money" environment created by QE could create instability in the financial sector, and be difficult to reverse. Wall Street didn't take kindly to the news and investors were notably shaken up -- leading to the drop.
We continue to see the effects of yesterday's news this morning, as minor news can send stocks barreling down. Based on yesterday's housing data release, which said that housing starts had slowed but that single-family home construction was up in January and permits were at the highest level seen since 2008, Home Depot (HD +1.52%) is down more than 2% this morning. Both it and its competitor Lowe's have been downgraded to "hold" by analysts.
Tech giant Intel (INTC +0.30%) is also down by 2.29% at the time of this writing. Though there hasn't been a great deal of news this morning, one bit may have investors wary in a time of uncertainty. Intel has released new advertisements stating that its first dual-core phone processor chip, Clover Trail+, is superior to ARM processors. While this may in fact be true, consumers won't be able to test the product and therefore cannot substantiate the claims -- unless they live in Asia, that is. At a time when Intel is under pressure in its server segment, bravado may not be appreciated by investors.
There are some winners coming out of the woodwork this morning, however. After announcing earnings this morning, retail behemoth Wal-Mart (WMT +2.88%) is up 3.09% after surprising analysts with higher-than-expected earnings. Though the company reported a slower holiday season than expected and increased pressure on consumer purse strings from increased taxes, the company's own tax rate was reduced in large part by tax credits. While there was an improvement in Wal-Mart's results, there's no sign that the Wal-Mart Indicator is in effect, since it was tax-related improvements that boosted results.
Boeing (BA 0.76%) continues its ascent this morning, up 0.51% at 11:45 a.m. ET on the news that it will be submitting a permanent fix to its 787 Dreamliner battery issue to the FAA for approval. News was released yesterday that suggested that the aircraft's lithium ion battery cells were too close together, causing the battery to overheat and in some cases burst into flames. With FAA approval, the aircraft manufacturer would be one step closer to returning its Dreamliner fleet to the air, and investors to its doors.
