How Today's Fed Divide Affected the Dow

How Today's Fed Divide Affected the Dow

You'd think that the release of the minutes from June's Federal Reserve policy meeting would bring some conviction to the markets. Instead, it brought confusion. The 2 p.m. ET release of last month's meeting revealed a remarkable lack of consensus about when and how to taper the central bank's quantitative easing efforts. While roughly half of Fed participants thought asset purchases should end this year, the rest saw need for meaningful improvement in the labor market before tapering.

In short, Wednesday's minutes confirmed the Fed's plan is as opaque as ever. The Dow Jones Industrial Average slipped 8 points, or less than 0.1%, to close at 15,291.

Hewlett-Packard was the index's top performer, adding 1.8%. On the face of it, you'd think that today's Gartner report that second-quarter PC shipments slumped 11% would be closer to a death knell than a boon for HP. The thing is, shareholders already know the PC business is on the decline, and with CEO Meg Whitman trying to refocus the business on enterprise services, a downward-trending PC market is tolerable. A 16% market share of the 76 million units shipped in the quarter still brings in plenty of revenue for the company.

If Gartner's ominous report today didn't hurt HP, surely it hurt PC software giant Microsoft ? Not in the least; the stock actually gained 1% Wednesday. That's because Microsoft, like HP, is diversifying out of the ill-fated PC business; COO Kevin Turner's presentation this week at its partner conference sparked speculation that the company will be releasing two new Surface tablets in 2014.

On the bearish side of blue chips, Bank of America slipped 1.2% as proposals for stricter leverage ratios for massive financial institutions loom large over some of the biggest names in the sector. The rules, which won't be enforced until 2018, require banks to hold higher percentages of capital for riskier assets in case their value rapidly declines. Analysts say that Bank of America, in addition to five other major financials, wouldn't currently adhere to the law with its holdings today.

Lastly, credit card mainstay American Express slid 1.7%, despite a lack of negative company-specific news. Financials in general were down today, and if the Fed decides to slow asset-buying anytime soon, investors could fear a slowdown in the economy and consumer spending. Shares are also trading near their 52-week highs after a 32% surge this calendar year alone, so some modest profit-taking isn't out of the question.

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