Earlier this week, the most potent catalysts of market activity were specific earnings announcements. But Wednesday morning, investors wait for U.S. Federal Reserve Chairman Alan Greenspan's statement on the macro state of the U.S. economy.
In the meantime, stocks are holding steady: The Nasdaq is up slightly, gaining 0.73 percent, or 22.90 points, to 3161.17 by 11:22 a.m. EST. The Dow is also slightly up, adding 0.29 percent, or 31.47 points, to 10712.53. TheStreet.com Inc.'s (TSCM) Internet index is down 0.14 percent, or 73 points, to 530.47, and the Standard 100 is down 0.59 percent, or 5.44, to 915.05.
The Federal Reserve is due to announce the conclusion of Wednesday's meeting later this afternoon. Wall Street expects the Fed will hold interest rates steady, maintaining a neutral stance. If this occurs, analysts predict a stock market rally, since a neutral bias signals possible interest rate cuts down the line.
Clues that the Fed will hold interest rates steady are continuing signs of a cooling economy. Industrial production, for instance, dropped 0.1 percent in October, and capacity use at plants, mines and utilities slipped to 82.1 percent, a low not seen since March. According to the U.S. Department of Commerce, business inventories in September rose by 0.1 percent, the slowest pace since January 1999. This slowdown in inventory buildup signals that companies are preparing for slower consumer spending.
In the meantime, Internet companies are seeing their own indications of an economic slow down. Merrill Lynch & Co. (MER) analyst Henry Blodget announced his prediction that online advertising will be even lower than expected in the fourth quarter. This will impact online-ad dependent companies, such as America Online Inc. (AOL) , which is down 16 cents, or 0.32 percent to $49.74, and Yahoo Inc. (YHOO) , which is down $1.75, or 2.94 percent, to $57.69. Ad-dependent DoubleClick Inc. (DCLK) is down $1.69, or 9.34 percent to $16.38, 24/7 Media Inc. (TFSM) is up 19 cents, or 7.50 percent to $2.69, and Engage is down 25 cents, or 10.53 percent, to $2.12.
Chip companies continue to be strong, despite volatility in other technology sectors. Texas Instruments Inc. (TXN) advanced $1.75, or 3.83 percent to $47.44. LSI Logic Corp. (LSI) is up $2.31, or 8.03 percent to $31.12, Xilinx Inc. (XLNX) gained $2.44, or 3.63 percent to $69.56, and Rambus Inc. (RMBS) is up $3.12, or 4.99 percent to $65.75.
Sycamore Networks Inc. (SCMR) is rallying up $3.62, or 5.63 percent, to $68.06, after posting strong first-quarter results late Tuesday.
Wireless provider Qualcomm Inc. is up $4.19, or 5.21 percent, to $84.56, despite a downgrade by David Heger of A.G. Edwards & Co. (AGE) , who knocked the stock to "accumulate" from "buy."