American Express Company (AXP), AT&T Inc. (T) & More: Investors Expect the Best From the Fed — but Are They Prepared for the Worst?

Just like yesterday, the stock market has posted an early advance this morning as investors look to the Federal Reserve for guidance on its future plans for monetary policy and its ongoing quantitative-easing program. Economic data this morning seemed to give the Fed latitude to take any action it wants at its meetings today and tomorrow, with a 6.8% rise in housing starts during May nevertheless falling short of expectations and another muted rise in consumer prices giving the Fed room to keep its stimulative actions going without worry of inflation.

The Dow Jones Industrial Average (INDEXDJX:.DJI) have responded favorably, rising 106 points by 10:55 a.m. EDT, showing the extent to which investors remain optimistic even after rising interest rates have forced them to anticipate worst-case scenarios involving the tapering of Fed bond-buying.

American Express Company (NYSE:AXP)

All but one of the Dow’s 30 components are on the up, with American Express Company (NYSE:AXP) leading the way with a 1.7% gain. This morning’s launch of AmEx’s Passion Project initiative represents its latest attempt to reach out to entrepreneurs and other motivated individuals. The the company is offering 10 awards of $2,000 each month for the rest of the year to help the winners make their projects a reality. With the initiative’s name including a hashtag and project submissions coming through YouTube, AmEx is clearly looking to boost its social-media presence as it broadens its appeal to a wider audience.

Telecom giants AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) have both posted gains of about 1.5%. Speculation about international expansion has raised interest in both companies lately, as Verizon Communications Inc. (NYSE:VZ)is reportedly looking northward at a potential acquisition of Canada’s Wind Mobile, while AT&T Inc. (NYSE:T)¬†yesterday spurred rumors that it might seek to buy Spain’s Telefonica Brasil SA (ADR) (NYSE:VIV). Of the two, Verizon Communications Inc. (NYSE:VZ)’s Canadian buyout would be much less complicated: The relatively small size of Wind Mobile makes an acquisition quite manageable. Both ideas make it clear, though, that opportunities in the U.S. market are starting to reach a saturation point, forcing the American giants to look elsewhere for growth.

Finally, beyond the Dow, Russian steel company Mechel has spiked 10% after announcing a share buyback program. With steel producers having been down and out for a long time, investors should expect to see similar moves from other companies in the future. Weak financial conditions make it hard for companies to spare the cash for buybacks, but when shares are down and out, buybacks produce the best return for the company.

The article Investors Expect the Best From the Fed — but Are They Prepared for the Worst? originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends American Express Company (NYSE:AXP).

Copyright © 1995 Р2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!