Stocks Finish Slightly Lower on Profit-taking Ahead of FOMC Meeting

Indices
S&P 500 1,507.72 -.12%
DJIA 13,309.77 -.03%
NASDAQ 2,571.75 +.03%
Russell 2000 830.90 -.12%
Wilshire 5000 15,172.86 -.12%
Russell 1000 Growth 594.76 -.09%
Russell 1000 Value 867.20 -.12%
Morgan Stanley Consumer 741.52 -.14%
Morgan Stanley Cyclical 1,049.23 +.32%
Morgan Stanley Technology 608.17 +.37%
Transports 5,217.93 +1.02%
Utilities 528.16 -.50%
MSCI Emerging Markets 124.50 -.57%

Sentiment/Internals
Total Put/Call .99 +43.48%
NYSE Arms 1.04 +25.66%
Volatility(VIX) 13.21 +.46%
ISE Sentiment 121.0 -27.11%

Futures Spot Prices
Crude Oil 62.20 +1.19%
Reformulated Gasoline 220.40 +.66%
Natural Gas 7.64 -1.75%
Heating Oil 183.05 +1.50%
Gold 687.0 -.49%
Base Metals 282.29 +.22%
Copper 372.0 +.12%

Economy
10-year US Treasury Yield 4.63% unch.
US Dollar 81.94 +.31%
CRB Index 308.90 -.01%

Leading Sectors
Steel +.93%
Networking +.83%
Homebuilders +.77%

Lagging Sectors
Alternative Energy -.72%
Papers -.82%
Gold -.89%

Evening Review
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Afternoon Recommendations
UBS:
- Reiterated Buy on (AAPL).

AG Edwards:
- Upgraded (HPQ) to Buy.

Afternoon/Evening Headlines
Bloomberg:
- Jana Partners LLC, an investment firm with more than $7.5 billion under management, said Alcoa Inc.(AA) should explore options, including a sale of the company, and drop its bid to acquire Alcan(AL).
- Corn yields on marginal land could increase 10% within five years as genetic modifications help meet global food and fuel needs, according to Monsanto(MON).
- AK Steel(AKS) CEO James Wainscott said the company isn’t “actively seeking a buyer,” following a report that Arcelor Mittal wants to acquire the company.
- Cisco Systems(CSCO) said third-quarter profit climbed 34% because of surging demand from small clients in the US and customers in emerging markets. The shares are falling 5.5% in after-hours trading.

BOTTOM LINE: The Portfolio finished slightly higher today on gains in my Computer longs, Networking longs and Software longs. I didn’t trade in the final hour, thus leaving the Portfolio 100% net long. The tone of the market was negative today as the advance/decline line finished lower, most sectors declined and volume was above-average. Measures of investor anxiety were above-average into the close. Today's overall market action was slightly bearish. I would classify today's action as another healthy consolidation day. A number of market-leading stocks I follow were higher and losses elsewhere were very mild considering recent gains. Technology, many cyclicals and homebuilders were areas of strength throughout most of the day. The NYSE cumulative advance/decline line hit another record high yesterday. The 10-year yield was stable throughout the day ahead of tomorrow's Fed announcement. I suspect the FOMC's policy statement will be just ever so slightly more dovish, while stressing that growth should improve in the second half of the year. There will once again be something for the hawks and doves, but overall I expect the market to interpret the statement as slightly more dovish.