This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Fed Policy Change Unlikely, Market May Slip

Stocks in this article: SPY DIA QQQ

NEW YORK ( TheStreet) -- The market has a tendency to pause and reconsider its direction immediately following a policy announcement by the Federal Reserve, cautioned an analyst ahead of Chairman Ben Bernanke's press conference on Wednesday.

The S&P 500 rises 63% of the time heading into a Fed pronouncement, posting an average gain of 0.4%, according to Rob Leiphart, an analyst at Westport, Conn.-based market research firm Birinyi Associates.

But in 62% of these instances, the market actually sheds 42 basis points on average on the day after the announcement, his report said.

The Fed concludes its two-day policy meeting Wednesday and is expected to stand pat on interest rates and other policies.

Although the U.S. economic outlook has exhibited signs of improvement since the central bank's Jan. 30 meeting, Jan Hatzius and Jari Stehn, economists at Goldman Sachs in New York, said in a note published Tuesday evening that they expect the Fed's asset purchases to continue until the third quarter of 2014 and do not project a rate hike until early 2016.

Bernanke is scheduled to hold a press conference at 2:30 p.m. EDT after the announcement at 2 p.m.

While U.S. unemployment has improved, there must be a clear signs of a labor market before the Fed might curb its bond-buying program, said Randy Cain, manager of the ASTON/Herndon Large Cap Value Fund that oversees about $90 million within Aston's $11 billion under management.

"And then with the geopolitical issues that are taking place particularly in Europe, it's highly unlikely that the time is correct for the Fed to take a change in policy direction," he said.

Written by Andrea Tse in New York

>To contact the writer of this article, click here: Andrea Tse.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,856.24 +78.09 0.44%
S&P 500 2,073.80 +12.57 0.61%
NASDAQ 4,772.9150 +24.5190 0.52%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs