Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Hewlett-Packard Company (HPQ), Intel Corporation (INTC), The Walt Disney Company (DIS): Dow Drops Ahead of Fed Minutes Release

Although we don’t believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes — just in case they’re material to our investing thesis.

Today at 2 p.m. EDT the Federal Reserve’s most recent meeting minutes will be released. As investors wait to see what the central bank’s policymakers discussed in detail at the last meeting — particularly regarding the fate of the Fed’s $85 billion-per-month bond-buying program — the major U.S. indexes are all lower. As of 12:55 p.m. EDT the Dow Jones Industrial Average is down by 56 points, or 0.37%, while the S&P 500 is down 0.33% and the Nasdaq has lost 0.27%.

Today’s stock market losses could be either compounded or reversed by the Federal Open Market Committee’s minutes. If they suggest that the Fed will begin to pare back its “quantitative easing” program within 2013, investors will likely sell off stocks at a much faster clip. In addition, bond yields, which have seen a healthy rise in the past two weeks, will surely jump. The Fed is scheduled to meet three more times this year, with the next meeting taking place from Sept. 17 to Sept. 19.

As I’ve noted, the Dow’s major moves so far this year nearly all correlate to Fed meetings and rising interest rates. Fed members have hinted recently during interviews that “tapering” will begin this year, which may indicate that the subject was discussed at the FOMC’s most recent meeting.

Hewlett-Packard Company

Stocks leading the downward charge

Shares of Hewlett-Packard Company (NYSE:HPQ) are down 1.2% today, even after BMO Capital bumped its price target on Hewlett-Packard Company (NYSE:HPQ) to $30 per share this morning, reasoning that management continues to find ways to improve operational performance. Although the firm raised its price target, it left the stock’s “market perform” rating unchanged. But today’s decline also precedes Hewlett-Packard Company (NYSE:HPQ)’s earnings report, scheduled to be released after the closing bell. While analysts estimate that revenue and profit will fall compared to the prior-year quarter, that’s not likely the cause for today’s move. Many investors are likely more concerned about how the company’s turnaround is progressing and when it expects to start growing revenue and profit again.

After receiving an upgrade yesterday and watching its shares rise more than 1%, Intel Corporation (NASDAQ:INTC) is down 1.6% today. The move may be related to investors’ — rather, traders’ — fear of Fed “tapering.” The stock currently boosts a dividend yield of more than 4%, and as the Fed begins to draw down its stimulative asset purchases, investors chasing yield will likely move back to bonds as Treasury yields creep higher. Additionally, with interests rates likely to rise down the road, it will cost businesses more to borrow cash. This will result in a slowdown in corporate spending and thus cuts in IT budgets. That means fewer PC refreshes by major corporations, which Intel Corporation (NASDAQ:INTC) and yesterday’s upgrade are counting on.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.