Reversal of Fortune for Stocks

In its monetary policy statement Wednesday, the Fed replaced the language, "the committee believes that policy accommodation can be maintained for a considerable period," with, "the committee believes that it can be patient in removing its policy accommodation."

In other economic news, initial unemployment claims for the week ended Jan. 24 fell by only 1,000, to 342,000. Claims and the four-week moving average have now been below the key 400,000 level for 17 straight weeks.

Additionally, the government's employment cost index climbed 0.7% in the fourth quarter, down slightly from the prior quarter's revised 1% level.

Finally, the Conference Board's December help-wanted index unexpectedly fell to 38 from 39, with economists looking for a slight rise to 40.

Other Markets

Markets overseas finished lower in the wake of the Fed's meeting and accompanying policy statement. In London, the FTSE 100 fell 1.3% to 4412, and Germany's Xetra DAX dropped 1.3% to 4096. Japan's Nikkei fell 0.7% at 10,779, and Hong Kong's Hang Seng slipped 0.7% at 13,334.

The 10-year Treasury note was recently unchanged, yielding 4.19%, after Wednesday's selloff, and the dollar was slightly stronger against the euro and lower vs. the Japanese yen. The euro was lately worth about $1.2413, while the dollar was buying 105.92 yen.

Positioning for the Fed

Most economists agree the Fed signified the start of a shift toward higher interest rates with its policy statement Wednesday. Several strategists, however, believe that the inevitable tightening process will not make a serious impact on one sector vs. another, except for a few that are very rate-sensitive.

"The move in interest rates is likely to be so modest and so gradual, it will not alter anyone's business model," said Awad. "One should not alter their investments for a move in rates from 1% to 2% over a 24 month period," which Awad believes is a reasonable course of action for the Fed.