EARLY TRADE

Mostly decent earnings headliners and early gainers have been quickly tempered by two days' worth of strong gains, some "waiting on the Fed" anxieties and one grounded barometer. As of 10:32 ET the NASDAQ Composite ($COMPQ) and S&P500 ($SPX) are flat as pancakes, with investors looking to do something other than helping themselves to thirds.

It's all about Oracle (ORCL)… well, kind of. Premarket "futchahs" actually had a trio of reasons to celebrate as Adobe (ADBE) and Morgan Stanley (MS) also delivered decent and well-received earnings reports. Spearheaded by an all-around excellent report from the software database giant that included blasting Q3 earnings by .03 cents [.25 EPS], beating revenues [$4.4B vs $4.33] and offering better-than-expected guidance on all key metrics, the bulk of catalysts certainly sounded good out-the-gate Wednesday. And for investors in Oracle stock and the other headliners, it still is, as all three are flashing significant shades of greenie. Elsewhere though, disappointing results from economic barometer FedEx (FDX), some Fed-inspired anxieties and two days of gains ripe for a bit of pruning have investors' schnitzeling after the opening bell ceremonies.  

The FOMC Decision is finally holding some influence over investors. "Some" as apparently "some" of yesterday's continued bullish behavior in the market was tied to "renewed" appreciation and expectations that the Fed will do the right thing, whatever that means. However, with decent gains on the table and banging up against all sorts of possible resistance, investors now actually have a legitimate reason to be fidgety in front of the FOMC announcement. Expectations are running fairly high on the Optimism Meter, as investors collectively believe the policy statement will shift towards a more balanced view by officials. That's versus the Fed's current bias towards raising rates as evidenced by the language, "extent and timing of any additional firming that may be needed." For those economic watchdogs interested, that message is nestled in the third paragraph and well-removed from the charting landscape.  

As mentioned, also helping in today's ‘FOMC inDecision' are disappointing results out of FedEx (FDX). Considered as a barometer of how other businesses are doing and hence the economy, Wednesday's package is viewed as a concern by many traders. Well, at least enough so as to affect the stock price, down -2.30 at 109.99. The company managed to beat Q3 EPS views by two-cents with results of $1.35 a share. More importantly, guidance was lowered for the fourth-quarter to a range of $1.93 – 2.08 versus prior guidance of $1.98 – 2.13 and consensus estimates of $2.03., due to a slowing economic environment. While the stock is grounded in today's session, the report doesn't seem as negative as the headlines might suggest. On the brighter side of things, management did tighten and bump up the midpoint of FY07 earnings to match Street estimates of $6.77. Further, the company said it feels the slower growth of Q3 represents "a healthy transition for the economy as it phases into a more sustainable growth rate."

GROWTH & MOVERS COVERAGE

EARNINGS CALENDAR

Select reports scheduled after the market close and in the premarket:

REPORT CALENDAR

Economic releases on tap:

INDICES & MARKET MOOD

Halfway through the lunchtime hour and traders are noshing on something other than equities. With the Fed still on tap and two days of fairly solid gains bumping up against at least a dozen or so reasons to schnitzel instead of hoping for the best: this corner agrees with the action fully.

IBD and I are at day number seven of the FTD count. A high-powered expansion bar should it occur today, would be a welcome event by many intermediate-based growth strategists. Short-term, however, the expectation would be for something other than a straight-line higher. Three days up and secondary indicators confirming a bit too much, too late kind of technical froth is likely to result in a pullback. Further, Fed-induced moves are notoriously fickle, despite whether the Street gets what it wants. I'm honestly not sure what that is. If the drop to a more measured policy [what they proclaim is good] is dependent on acknowledging the sub prime problem, is that really a good thing? That's for others to decide. While I can't control the spin that's sure to follow, I can control my portfolio if I watch and master what's truly important.

Chris Tyler
Staff Writer & Options Strategist
Optionetics.com ~ Your Options Education Site
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The information offered here is based upon Christopher Tyler's observations and strictly intended for educational purposes only, the use of which is the responsibility of the individual.

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