Following the announcement from the Fed, the dollar rose to the day’s highs with the euro falling to $1.2227. Some investors had expected Fed Chairman Bernanke to announce new stimulus measures after the central bank acknowledged that U.S. economic growth has “decelerated” and said that the Fed was “prepared to take further action.” Others, however, were skeptical that the Fed would act.

European markets finished the day broadly higher, with the Stoxx Europe 600 adding 0.5% and Japan’s Nikkei Stock Average lost 0.6% to snap a four-day win streak while the Shanghai Composite bucked the trend by rising 0.9%.

However, the US manufacturing sector contracted for the second straight month as the global slowdown pulled down export orders. 

Adding to the alarm today, Knight Capital had a problem with their algorithmic based high frequency trading platforms. Knight Capital (KCG) experienced unusual price swings as their systems blasted buy and sell orders at around 100x the usual frequency. This news is breaking at the moment, but it appears that the NYSE and SEC will be reviewing trades in nearly 150 symbols executed between 9:30 and 10:15 ET. Following the 2010 flash crash, regulators have been examining the validity and effectiveness of high frequency trading systems. 

Across the pond, the Stoxx Europe rose 0.5%, as investors continue to shrug off poor manufacturing data across the continent. Crude oil futures have gained near 1% to $89 a barrel while gold futures lose -0.4%, to fall to $1,610 an ounce. 

In corporate news, MasterCard fell after the credit-card company topped earnings expectations after a previously disclosed pretax charge, but missed on revenue estimates. Avon Products lost ground after the beauty products seller reported second-quarter earnings and revenue that fell a bit shy of analyst estimates. Finally, Allstate, the largest publicly traded home-and-auto insurer in the U.S., climbed after the company raised rates and reported lower catastrophe losses.

“Madagascar 3: Europe’s Most Wanted,” one of two feature films released by DWA this year generated $501 million, an impressive number, but with less than expected demand numbers outside of the U.S. Apparently the title of this film revealed a deeper signal.

David Cornes holds a degree in economics from the University of Montana.

As for the announcements today there are many:
• Motor Vehicle Sales Consensus
• MBA Purchase Applications 7:00am
• ADP Employment Report 8:15am
• PMI Manufacturing Index 9:00am
• ISM MFG Index 10:00am
• Construction Spending 10:00am
• EIA Petroleum Status Report 10:30am
• FOMC Meeting Announcement 2:15pm

The market will open at a decline today with the S&P 500 down 0.43%. That
downward trend is not affecting the 10-year treasuries and Oil though; both are on
the rise with increases of 1.35% and 0.44% respectively. The dollar is also on the
upswing at 0.08%.

In the tech field Apple lovers have been refueled with the rumors of a special event
on September 12th. This alone has sent the stock back over the $600 mark as most
are expecting this event to be the unveiling of the iPhone 5 and possibly the new,
smaller iPad.

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China, again outperformed their Asian peers, as the Hang Seng added .1%, for a fifth straight day of
gains. China railway construction gained 2.2% and is up more than 60% on the year. Huaneng power
reversed early gains to close down 1.2% after reporting better-than-expected first half profit Tuesday
night, the stock is still up over 34% so far this year.

Europe is currently up supported, of course, on hopes of ECB policy action, which puts them in a
vulnerable position if action is not taken. The FTSEurofirst 300 is up .3% so far today. The hope is for
the ECB to announce steps to lower borrowing costs for Spain and Italy, however that means the debt
will still be lingering. Schneider Electric gained 2.8% after posting a rise in first half operating profit and
Standard Chartered grew 3.5% after beating forecasted results.

The UK manufacturing PMI fell to 45.4 in July from 48.4 in June reaching its lowest level since May 2009.

In the US the MBA purchase index is up 1% after two weeks of decline, however the refinance is again
down 8% reflecting a large drop in applications for government loans.

Nokia shares are up 10.4% in premarket on rumors that Lenovo may be interested in the company.

Commodities look to begin the day with gains currently showing crude, natural gas, gold and silver all
up.

Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market.
Comments can be directed to ryghcw19@uww.edu

In earnings news, Dendreon slumped -22.9% after the biotechnology company reported a wider-than-expected second-quarter loss and said it was reducing its workforce by more than 600 employees over the next year as part of a restructuring aimed at cutting costs by $150 million a year.

European markets fell, with the Stoxx Europe 600 losing -1%, as weak data and disappointing earnings reports weighed on sentiment, offsetting expectations of new stimulus measures from the Fed and European Central Bank.