Dow climbed 24. advancers barely ahead of decliners & NAZ rose 9. The MLP index rose 2+ to the 531s & the REIT index was about even at 300. Junk bond funds were mixed & Treasuries pulled back slightly. Oil fell
from a 2-week high after an Energy Information Administration
report showed US inventories rose the most in 5 months. Gold inched higher.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.8620764713499613)
Photo: Bloomberg
The Federal Reserve (FED) maintained a commitment to keep interest rates near zero for a “considerable time” after asset purchases are completed, saying the economy is expanding at a moderate pace & inflation is below its goal. “Labor market conditions improved somewhat further” while “significant underutilization of labor resources” remains, the FOMC said. “Inflation has been running below the committee’s longer-run objective.” In Jul, the FED said inflation was “somewhat closer” to its goal. Policy makers tapered monthly bond buying to $15B in their 7th consecutive $10B cut, staying on course to end the program in Oct. Bond purchases intended to hold down long-term interest rates have swelled the FED balance sheet to $4.4T. FED officials raised their estimate for the federal funds rate at the end of 2015 to 1.375%, compared with 1.125% in Jun. The rate will be at 3.75% at the end of 2017, the FED said today for the first time. The guys are debating how much longer to keep interest rates near zero as they get closer to their goals for full employment & stable prices. At the same time, they are considering a change in guidance on the outlook for borrowing costs to give them more flexibility to react to the latest economic data. “The likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year,” according to the statement. The FED repeated that it will consider a wide range of information in deciding when to raise the benchmark federal funds rate, which it has kept near zero since Dec 2008. The FED published new guidelines for its exit strategy, saying that the phaseout of reinvestment “will depend on how economic and financial conditions and the economic outlook evolve.” The participants said the main tool to move the federal funds rate will be changes in the interest rate it pays on excess reserves. FED officials said reverse repurchase agreements will be used “as needed” to help control the fed funds rate & will phase out later.
Fed Keeps ‘Considerable Time’ Pledge as Growth ‘Moderate’
Russia called the new law providing a special status for war-torn eastern Ukraine “a step in the right direction” while the gov in Kiev cautioned that a drop in Russian natural gas supplies could hobble the EU during the peak heating season. A shaky cease-fire held in Ukraine’s Donetsk & Luhansk regions, with multiple violations reported since the truce took effect on Sep 5. The Ukrainian parliament yesterday approved a measure for limited self-rule in the region. “Russia sees that document as a step in the right direction,” the Foreign Ministry in Moscow said. The law “is intended to create the necessary conditions for the restoration of normal life in the region and to ensure the constitutional rights and freedoms of the public.” Ukrainian Energy Minister Yuri Prodan said after a cabinet meeting that Russian gas transit via his country to Slovakia decreased by 25% & that the decline could threaten the EU’s energy security. 32% of EU imports of natural gas came from Russia in 2012. “Fierce” battles were under way in Donetsk since the morning hours, with 2 civilians killed & 3 wounded as of noon, the local gov said. Gov forces were shelled by Russian & rebel troops at 15 locations during the past 24 hours, a spokesman for the Ukrainian military said. Russian Foreign Minister Lavrov reiterated today that the truce in eastern Ukraine is “still in place” while there have been violations that he said were instigated by Ukrainian forces. “A great number of incidents have been instigated by official representatives of Ukrainian armed forces,” Lavrov said. “And we hope that the Ukraine officials will stop such acts.” The uncertainty about the peace process is overshadowing the ratification of Ukraine’s association agreement with the EU on the same day that lawmakers approved a bill expanding the powers of the Donetsk & Luhansk regions.
Russia Sees Positive Step in Law for Eastern Ukraine
Microsoft, a Dow stock, increased its div 11% & is replacing 2 longtime board members when they retire this year, as CEO Satya Nadella puts his own stamp on the software maker. The company said that it is raising its quarterly div 3¢ to 31¢. The 2 departing directors are Dave Marquardt & Dina Dublon, with Kraft Foods Group (KRFT). CFO Teri List-Stoll & Visa (V), another Dow stock, CEO Charles Scharf are joining the board. Nadella has been aggressive in making changes at MSFT since he became CEO in Feb. He has shuffled management, emphasized making software products available for all types of devices, & announced 18K job cuts. Earlier this week, MSFT said it would buy Mojang for $2.5B. The shifts have included sweeping out some veteran executives & board members. Nadella has also been working to increase the company's appeal to investors. He has started appearing on the company’s quarterly earnings calls. On his first such call in Apr, he pledged to be more accountable to shareholders. MSFT typically increases the div annually & boosted it 22% last year to 28¢. Yesterday’s increase exceeded the 30¢ estimate. The stock fell 24¢. If you would like to learn more about MSFT, click on this link:
club.ino.com/trend/analysis/stock/MSFT?a_aid=CD3289&a_bid=6ae5b6f7
Microsoft’s Nadella Raises Dividend, Changes Two Board Members
The FOMC annoucement had no great surprises, but any hint about approaching a period of higher interest rates makes traders nervous which explains the tepid response by the markets. Recent weakness in NAZ is related to the stock market getting ready for the Alibaba IPO, which could be the largest in history. The idea is that investors sell other tech stocks before the IPO to pay for those shares. Generally, the markets have bounced back slightly after other major IPO's in the past. Meanwhile, the wars drone on as the US tries to figure out if it will send more troops to the Iraq conflict. Dow is at a new record, although it's only 40 above the record set 2 months ago. That's called treading water.
AMJ (Alerian MLP Index tracking fund)
| CLV14.NYM | ....Crude Oil Oct 14 | ....94.15 |  ...0.73 | (0.8%) |
The Federal Reserve (FED) maintained a commitment to keep interest rates near zero for a “considerable time” after asset purchases are completed, saying the economy is expanding at a moderate pace & inflation is below its goal. “Labor market conditions improved somewhat further” while “significant underutilization of labor resources” remains, the FOMC said. “Inflation has been running below the committee’s longer-run objective.” In Jul, the FED said inflation was “somewhat closer” to its goal. Policy makers tapered monthly bond buying to $15B in their 7th consecutive $10B cut, staying on course to end the program in Oct. Bond purchases intended to hold down long-term interest rates have swelled the FED balance sheet to $4.4T. FED officials raised their estimate for the federal funds rate at the end of 2015 to 1.375%, compared with 1.125% in Jun. The rate will be at 3.75% at the end of 2017, the FED said today for the first time. The guys are debating how much longer to keep interest rates near zero as they get closer to their goals for full employment & stable prices. At the same time, they are considering a change in guidance on the outlook for borrowing costs to give them more flexibility to react to the latest economic data. “The likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year,” according to the statement. The FED repeated that it will consider a wide range of information in deciding when to raise the benchmark federal funds rate, which it has kept near zero since Dec 2008. The FED published new guidelines for its exit strategy, saying that the phaseout of reinvestment “will depend on how economic and financial conditions and the economic outlook evolve.” The participants said the main tool to move the federal funds rate will be changes in the interest rate it pays on excess reserves. FED officials said reverse repurchase agreements will be used “as needed” to help control the fed funds rate & will phase out later.
Fed Keeps ‘Considerable Time’ Pledge as Growth ‘Moderate’
Russia called the new law providing a special status for war-torn eastern Ukraine “a step in the right direction” while the gov in Kiev cautioned that a drop in Russian natural gas supplies could hobble the EU during the peak heating season. A shaky cease-fire held in Ukraine’s Donetsk & Luhansk regions, with multiple violations reported since the truce took effect on Sep 5. The Ukrainian parliament yesterday approved a measure for limited self-rule in the region. “Russia sees that document as a step in the right direction,” the Foreign Ministry in Moscow said. The law “is intended to create the necessary conditions for the restoration of normal life in the region and to ensure the constitutional rights and freedoms of the public.” Ukrainian Energy Minister Yuri Prodan said after a cabinet meeting that Russian gas transit via his country to Slovakia decreased by 25% & that the decline could threaten the EU’s energy security. 32% of EU imports of natural gas came from Russia in 2012. “Fierce” battles were under way in Donetsk since the morning hours, with 2 civilians killed & 3 wounded as of noon, the local gov said. Gov forces were shelled by Russian & rebel troops at 15 locations during the past 24 hours, a spokesman for the Ukrainian military said. Russian Foreign Minister Lavrov reiterated today that the truce in eastern Ukraine is “still in place” while there have been violations that he said were instigated by Ukrainian forces. “A great number of incidents have been instigated by official representatives of Ukrainian armed forces,” Lavrov said. “And we hope that the Ukraine officials will stop such acts.” The uncertainty about the peace process is overshadowing the ratification of Ukraine’s association agreement with the EU on the same day that lawmakers approved a bill expanding the powers of the Donetsk & Luhansk regions.
Russia Sees Positive Step in Law for Eastern Ukraine
Microsoft, a Dow stock, increased its div 11% & is replacing 2 longtime board members when they retire this year, as CEO Satya Nadella puts his own stamp on the software maker. The company said that it is raising its quarterly div 3¢ to 31¢. The 2 departing directors are Dave Marquardt & Dina Dublon, with Kraft Foods Group (KRFT). CFO Teri List-Stoll & Visa (V), another Dow stock, CEO Charles Scharf are joining the board. Nadella has been aggressive in making changes at MSFT since he became CEO in Feb. He has shuffled management, emphasized making software products available for all types of devices, & announced 18K job cuts. Earlier this week, MSFT said it would buy Mojang for $2.5B. The shifts have included sweeping out some veteran executives & board members. Nadella has also been working to increase the company's appeal to investors. He has started appearing on the company’s quarterly earnings calls. On his first such call in Apr, he pledged to be more accountable to shareholders. MSFT typically increases the div annually & boosted it 22% last year to 28¢. Yesterday’s increase exceeded the 30¢ estimate. The stock fell 24¢. If you would like to learn more about MSFT, click on this link:
club.ino.com/trend/analysis/stock/MSFT?a_aid=CD3289&a_bid=6ae5b6f7
Microsoft’s Nadella Raises Dividend, Changes Two Board Members
Microsoft (MSFT)
The FOMC annoucement had no great surprises, but any hint about approaching a period of higher interest rates makes traders nervous which explains the tepid response by the markets. Recent weakness in NAZ is related to the stock market getting ready for the Alibaba IPO, which could be the largest in history. The idea is that investors sell other tech stocks before the IPO to pay for those shares. Generally, the markets have bounced back slightly after other major IPO's in the past. Meanwhile, the wars drone on as the US tries to figure out if it will send more troops to the Iraq conflict. Dow is at a new record, although it's only 40 above the record set 2 months ago. That's called treading water.
Dow Jones Industrials
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