Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.
Perhaps asking for a continuation of yesterday’s strong move higher would be too much to ask for optimists who saw the broad-based S&P 500 (INDEXSP:.INX) dip for the 10th time in the past 13 sessions.
The big news moving the markets today was the release of the Fed’s minutes from its meeting in late July, which showed an almost unanimous agreement among the 12 members of the Federal Open Market Committee that now was not the proper time to change its ongoing $85-billion monthly stimulus package. While good news, it didn’t exactly lend any clues as to when the Fed will indeed begin paring back QE3, which is what the market was really hoping to find out.
On an even more downbeat note, the Mortgage Brokers Association’s weekly mortgage application data showed a 4.6% drop in demand last week. The decline follows mortgage lending rates matching their highest levels for the year, and marks a decline of more than 50% since May in mortgage applications. The quicker rates rise and applications decline, the more worry for the still fragile housing sector.
By the end of trading, the S&P 500 had declined by 9.55 points (-0.58%) to close at 1,642.80. The S&P 500 is now off nearly 4% over the past two-and-a-half weeks.
Topping all S&P 500 stocks today was GPS-device maker Garmin Ltd. (NASDAQ:GRMN), which added 4.8% after receiving an upgrade to neutral from sell at Goldman Sachs. The reason for the upgrade stems from the introduction of a new line of action camera products from Garmin Ltd. (NASDAQ:GRMN) known as VIRB and VIRB Elite, which caused Goldman to ever-so-slightly bump up its EPS projections on the company. As for me, I’d like to remind you that analyst actions rarely offer any long-term impact on a company, so I’d take today’s move with a grain of salt. Garmin Ltd. (NASDAQ:GRMN) still has a lot of inconsistencies to work through, with smartphones and tablets taking away the need, in some cases, for a GPS device. This has the potential to put the bulk of its long-term business model at risk.