Before FED announcement, stocks up

Dow & NAZ are pretty much even but advancers were ahead of decliners 3-2. S&P 500 FINANCIALS INDEX was down 1, Alerian MLP index up 7 on strength for oil & the Dow Jones REIT index pulled back 4 after yesterday's very strong rally. High yield (junk) bond funds sold off, as usual, for no reason other than fear of the unknown. The VIX, Vollatility Index, was up 2, fear isn't going away soon. Everybody is waiting for the Federal Reserve announcement this PM. A 50 basis point cut is widely expected, some even see a cut of 75 basis points (or even 100).

Oil was very strong, betting that stock market gains signal stronger economies around the world:

CLZ08.NYM

Crude Oil Dec 08

....68.35

.... 5.62 (9.0%)

• Oil prices jump on strengthening markets- AP

Today is the anniversary of the ugliest stock market day of 1929. Today looks it will be a relatively mild day. The FED announcement & guidance will move markets in the PM, but after yesterday's monster gains, extremely wild movements are not expected.

The dollar has been going through its versions of wild swings this week. Today the Japanese ¥ rose a little to 97s but is down from the 93s just a few days ago. The weaker ¥ is a big help for their export companies. Meanwhile the € rose to 1.29 in just a few days.

•Dollar Drops Most Since 1985 on Speculation Fed to Cut Rate by Half Point


Company news varies. General Motors (GM), the lowest priced Dow stock, is now #2 in autos worldwide with Toyota (TM) promoted to #1. Sony (SNE) saw profits plunge. Some divisions reported good results but the strong ¥ hurt them badly & looking forward it may do more damage. Kraft (KFT), newest Dow stock, had very good earnings largely related to selling Post & Oscar Meyer. The ongoing business generated 44¢ EPS, a penny above expectations, stock up 18¢. Kellogg reported good earnings & upped guidance but the stock pulled back from early gains to a modest 12¢ gain.

• GM 3Q global sales drop 11 pct, trail Toyota- AP
• Sony profit plunges 72 percent on strong yen- AP
• Kraft Foods 3Q more than doubles on Post sale- AP

•Kellogg Profit Rises More Than Estimates on Price Increases; Shares Climb

I just looked & the Dow is up 93 while NAZ is up 15 as buyers are anticipating great news from the FED. Tomorrow the rate cut will be history, back to macro economic reports & earnings.