It's a 25-Basis-Point Baby Boy!

Index	Close	Change
Dow	9011.53	-98.32
S&P 500	975.31	-8.14
Nasdaq Composite	1602.63	-2.98
Nasdaq 100	1188.33	-3.37
Russell 2000	443.21	+2.32
Semiconductor Index (SOX)	354.01	-1.71
Bank Index	858.55	-3.62
Amex Gold Bugs Index	147.17	+1.30
Dow Transports	2356.13	-32.98
Dow Utilities	250.50	-0.01
NYSE advance-decline	+280	+77
Nikkei 225	8932.26	+13.00
10-year Treasury Bond	3.36%	+0.096

Curtain Up, Bonds Down: Turning to the action, the market was basically up about 1% in the first couple hours, depending on the index you looked at. We then marked time heading into the FOMC meeting, when the boys at the Fed chose to disappoint the crowd with only a 25-basis-point cut. Yours truly was dead wrong in scripting the scenario, but it would appear that the bond market had a similar notion, as it was clocked for a buck and a half, after having been down almost two dollars at one point.

Obviously, if the fixed-income market declines, that will affect housing, which will affect the economy. The Fed's statement tried to imply that things were getting better, and it noted that risks were balanced: "The Committee perceives that the upside and downside risks to the attainment of sustainable growth for the next few quarter are roughly equal." But at the end of the day, the addict needs more drugs, and if he doesn't get them, trouble ensues. I think that was the verdict from the bond market. At least today, that was the housing stocks' take on bond-market action, as those stocks were roughed up 4%, plus or minus, across the board, and in fact led the tape to the downside.

Taking a Hard Line on 'Soft Spots': Meanwhile, I find it interesting that the Fed appeared to be so sanguine, when in the last 24 hours, the news out of transportation companies such as CNF(CNF Quote) and FedEx(FDX Quote) has been less than heartening. And today we heard more bad news from a couple of state governments. According to a story in today's Trenton Times, the governor of New Jersey said there's a risk of a state shutdown if the legislature can't agree on a budget by the July 1 deadline. Also, the California comptroller was on the tape saying the state was ready to halt bill payments. So, there are a couple of good-sized states where things don't appear to be improving too rapidly.