No Relief After Hours

Apple posted fourth-quarter sales that were below estimates and its shares were recently down 10.6% in after-hours trading. Meanwhile, AMD's results flew by expectations and its stock was recently up 1.3% in post-close trading.

While Apple's disappointment could dictate trading Wednesday, it's also notable that market breadth was decidedly negative Tuesday even as the S&P and Nasdaq suffered relatively modest declines. Decliners led advancers 5 to 4 in Big Board trading, where a solid 2.3 billion shares changed hands. Losers outpaced gainers by 21 to 8 in Nasdaq trading, where 1.9 billion shares traded and over 75% of the volume was to the downside.

Parsing the Minutes

Market sentiment might also vary on how much importance is granted to the Fed's minutes. On the one hand, the minutes revealed that the Fed may not have been as hawkish as recently feared.

There was some talk about changing the language of future statements, but that could even be construed to imply that the Fed may be closer to the end of the road. "Some sentiment was expressed to consider changes to forward-looking aspects of the statement at upcoming meetings, in part because of the considerable reduction in monetary policy accommodation that had already been accomplished," the minutes read.

"On balance, this is a report that does not suggest that the Fed is about to tighten more aggressively," says John Lonski, senior economist at Moody's. "And it's also mildly upbeat on about economic prospects."

Neither of these signals were pleasing for the bond market, which remains concerned that Fed policy may fall behind the curve on inflation, which erodes the value of fixed-assets such as bonds. The benchmark 10-year Treasury bond fell 7/32 while its yield rose to 4.39%.

But given recent economic data pointing to rising inflationary pressures and the much-more hawkish tone of Fed officials, most notably last week, there could be legitimate questions about the Fed's thinking.

"The minutes are now a little bit dated," says Lonski. "Depending on what we see in the [Consumer Price] Index Friday, this piece of paper could be worthless."