In a move today that surprised no one, the Federal Open Market Committee raised its overnight interest rate target to 1.25% from 1.0%. It's the first increase in four years, and edges interest rates up slightly from a 46-year low. Fed watchers expect this to be the beginning of a string of rate increases in the coming year as our central bank returns rates to a "neutral level." TV watchers and American culture in general expect to be further demeaned by yet another episode of The Simple Life 2: Road Trip, which airs tonight.

Get the Fed news straight from the horse's mouth right here.

In today's Motley Fool Take:

Spider-Man's Sticky Return


Rick Aristotle Munarriz (TMF Edible)

With great power comes great responsibility. Spidey's motto certainly fits as Spider-Man 2 debuts today at a multiplex screen near you. After Sony(NYSE: SNE) saw the original gross $821.7 million in ticket sales worldwide, it's easy to pin the sequel as the likely top dog of the 2004 summer season.

The way ticket prices seem to inch higher every year, it's only natural to see records fall. Just as Shrek 2 became the biggest moneymaker in animated film history earlier this month, box-office inflation has often been kind to the follow-up flick.

But Sony isn't the only company banking on Spidey's buck. Obviously, creator Marvel Enterprises(NYSE: MVL) stands to reap princely sums through a variety of licensing streams if the movie and related merchandise fare well.

The original movie also lined Activision's(Nasdaq: ATVI) cash-rich pockets. The success of its Spider-Man video game made the software specialist a winner in 2002, and it is aiming for similar heights this summer, too.

While we will be thankfully spared seeing Spider-Man's logo on baseball bases, the web-slinger is everywhere. Even Amazon(Nasdaq: AMZN) is getting into the act with its Spider-Man Store.

Maybe it's just our Spidey sense at play, but Marvel, Activision, and Amazon have all been past recommendations of our Motley Fool Stock Advisor newsletter. Maybe we all have a little bit riding on Spider-Man's success this summer.

Let's hope the good guys come out ahead.

Longtime Fool contributor Rick Munarriz hasn't bought tickets to see the sequel yet, but he'll get there. Bank on it. He does not own shares in any of the companies mentioned in this story.

Shameless Plug: Quarterlife Conference

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Consumer Confidence Disconnect


Bill Mann (TMF Otter)

A couple of contradictory news items came across the wires yesterday, leading me to wonder whether American consumers had simply, collectively turned into a bunch of barking lunatics.

The Conference Board, a private group that tracks consumer confidence, released its findings yesterday, stating that the index had reached its highest level in more than two years. Where analysts expected the number to come in at about 95, it shot off the charts, increasing from 93.1 in May to 101.9 for June. The last time the Conference Board number was this high was June 2002, when it printed at 106.3. Sort of makes me wonder what was so great about June 2002, but there you go.

We can talk about the fact that oil prices are still sky-high, that other goods, commodities, and services are at multiyear peaks, or that the easy money from housing refinancing seems likely to peter out as the Federal Reserve raises overnight rates, finally. That's all interesting, and it's all germane in ways that even the smartest of us will never fully understand.

Here's what I want to know: If consumers are so confident, then why in the world are the biggest retailers and durable goods manufacturers getting plastered? In the past week, retailing giant Target(NYSE: TGT) warned that its sales are light, which we could conceivably make the case (not that I would) for being company specific. But when Wal-Mart(NYSE: WMT) makes the same reductions in sales forecasts, I wonder what that could possibly say about the true measure of consumer confidence. Are they confident because they're spending so much more money at the gas pump? Wal-Mart CEO Lee Scott says that the higher gas prices take out on average $7 in household weekly budgets.

Of course, even though at $258 billion in annual revenues Wal-Mart can be considered a viable proxy for true consumer confidence, it is possible that its cut-price image gives the giant's operations a sort of countercyclicality. Consumers who feel flush with cash may choose to be a little less price-conscious and, thus, would buy goods at a Best Buy(NYSE: BBY) or a Lowe's(NYSE: LOW) rather than at Wal-Mart. But wouldn't Target be a logical beneficiary if this were the case?

Unlike many market commentators, I don't tend to give the average consumer a great deal of faith in predicting where the economy is going. Consumer confidence numbers track along nicely over time with such things as cheap, available leverage as they do with actual gains in financial standing. But this month's dichotomy really has me scratching my head. If we're willing to open up our wallets in June that much more than we were in May, then where the heck is all of this opening going on? If Wal-Mart's sales are slowing, that directly or indirectly impacts, oh, about half of all publicly traded companies.

Bill Mann owns none of the companies mentioned in this story. He's not among the ranks of giddy consumers, either. For a monthly sampler of companies that generate income for their investors, consider a free trial to Mathew Emmert's Income Investor.

In Memoriam: Dr. Ken Meyers

Longtime Fool Community member Dr. Ken Meyer (screen name JohnGaltII) was killed in a car accident on Friday, June 25. He was 42. Dr. Meyer was a member of our community for more than six years and led many vigorous debates.

With a bachelor's degree in aeronautics in astronautical engineering and an M.D. in pediatrics, he was no lightweight when it came to critical thinking. However, in his more than 17,000 online posts, Dr. Meyer argued without bitterness and challenged all comers without boasting. To view his obituary, sign a memorial guest book, and read comments from those whose lives Dr. Meyer touched, visit the Atlanta Journal-Constitution online.

Research In Motion's Hot


Jeff Hwang

One of the hottest growth stories just got hotter.

Research In Motion (Nasdaq: RIMM) shares are up 15% to $69.43 this afternoon after the handheld device maker posted another strong quarter of results and continued to bump already-explosive sales and earnings forecasts even higher. For the first quarter, revenues jumped 28% from the fourth quarter and 158% from last year's quarter to $269.6 million, helping turn last year's loss into a $0.28 per-share profit. Meanwhile, the company added 270,000 BlackBerry subscribers during the quarter, finishing the quarter with about 1,340,000 subscribers.

But it's the even brighter future that has the market in a frenzy.

Research In Motion bumped its second-quarter revenue forecast up $20 million to between $290 million and $310 million while raising its earnings expectation to $0.32 to $0.37 per share from its previous guidance of $0.24 to $0.29. That momentum is expected to accelerate in the third quarter, with the company earning $0.35 to $0.40 per share on sales of $340 million to $360 million.

As Chairman Jim Balsillie said in the earnings release, the company's "carrier partners are experiencing significant success in the market place and are further expanding sales and marketing efforts to capitalize on the growing interest in BlackBerry."

So Research In Motion's intriguing growth story continues. A big part of that is success in pushing the "CrackBerry" into international markets, helped by a growing list of business partners and clients such as PalmSource(Nasdaq: PSRC), Nokia(NYSE: NOK), IBM(NYSE: IBM), Motorola(NYSE: MOT), and Vodafone(NYSE: VOD). The stock's performance has reflected this, providing an almost neat seven-bagger over the past year.

The real question now is valuation, which -- given Research In Motion's explosive growth success -- doesn't even look all that scary. For more on this growth story, interested investors should check out:

Fool contributor Jeff Hwang owns none of the companies mentioned above.

Quote of Note

"To be able to practice five things everywhere under heaven constitutes perfect virtue. [They are] gravity, generosity of soul, sincerity, earnestness, and kindness." -- Confucious

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