As we've seen so often in the past when the Federal Open Market Committee has deliberated on interest rates and monetary policy, the stock market stayed in a relatively tight range today as investors nervously await whether the Federal Reserve will cause the same uproar that hit stocks so hard after the FOMC's last meeting. With most investors having received the message loud and clear that the Fed will stand ready to keep its quantitative easing program working at full strength if just about any signs of economic weakness emerge, any shift in strategy could send stocks down once again. Yet for today, the Dow Jones Industrials (^DJI -0.11%) settled for a loss of a single point after having posted early gains that would have resulted in a new all-time record high for the average if they had held up.
The two big culprits within the Dow that helped pull the average down were AT&T (T 1.88%) and Verizon (VZ -0.53%), with Verizon leading the way with a 2% drop and AT&T following suit with a 1.3% decline. As Fool contributor Travis Hoium noted earlier today, the stocks apparently responded negatively to earnings news from Sprint (S), which soared more than 7% even as the company reported massive subscriber losses and failed to persuade most of its Nextel customers to migrate to its Sprint service after shutting down the Nextel network during the quarter.
Yet investors in the telecom industry are clearly expecting more from Sprint as the impact of the SoftBank acquisition of a majority stake in the carrier starts to take effect. With plans for huge capital expenditures this year, the company is clearly taking its newfound cash and looking to take a more competitive position within the space. It could cost Verizon and AT&T a lot to hold off the competition, and that seems to be what's making shareholders unhappy today.
Looking outside the Dow, the biggest losers were in the potash fertilizer industry, with PotashCorp (POT) losing a sixth of its value today. PotashCorp and several other producers got crushed when Russian fertilizer-maker Uralkali Group withdrew from the consortium that controls the vast majority of the potash market. Given that Uralkali is the world's biggest producer of fertilizer, its withdrawal raises huge fears that it will flood the market and drive potash prices lower, hurting PotashCorp's profits and jeopardizing their already tenuous control of the industry. With natural-gas prices still low enough to help support potash-alternatives like nitrogen-based fertilizers, the news was the last thing potash producers needed to hear in an already challenging environment for commodities generally.
