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Fed Unchanged - Dow Little Changed

FED UNCHNAGED – DOW LITTLE CHANGED

The Dow closed modestly higher on Wednesday, after the Federal Reserve held its key interest rate steady and reduced expectations for a rate hike at its next meeting.

"Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased," the Fed said in its statement.

It was the first time the U.S. central bank has held rates steady since embarking in September on a series of rate reductions to stimulate an economy grappling with a housing downturn and credit crisis.

I think Bernanke was trying to get the effects of raising rates without actually raising rates, says Karen Finerman.

To me the language says they’re raising, counters Guy Adami. Just not yet.

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AFTER HOURS ACTION: RESEARCH IN MOTION

BlackBerry maker Research In Motion reported a higher first-quarter profit on Wednesday, but its shares dropped sharply in after-hours trading as the results and outlook fell short of analyst expectations.

I think this is a great opportunity to buy this name, says Pete Najarian. They added 2.3 million subscribers and they haven’t yet brought out all the products that everyone is looking forward to. I like it at this level

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AFTER HOURS ACTION: ORACLE

After the bell Oracle reported robust fourth-quarter earnings on software revenue. First shares rose in after hours trading but later turned lower.

These numbers are fantastic, says Guy Adami. I think the BEA Systems acquisition is paying off. However the stock has had a monster run and I wouldn’t pile in now. Wait for a pullback.

I got into the stock today, counters Pete Najrian. And I wouldn’t be surprised to see this stock take off.

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AFTER HOURS ACTION: NIKE

Despite posting a rise in quarterly profits, shares of Nike fell in extended trading after the world's largest athletic shoe and apparel maker said that advanced orders for its goods were flat in the United States through November.

They have rubber in their products, explains Karen Finerman, which is tied to oil. They have to be getting squeezed.

Their margins were a little light, says Guy Adami. I think the stock will pull back to $62.

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OIL GAUGE

The price of oil declined Wednesday after an unexpected rise in inventories suggested high fuel prices could continue to drag down demand.

The price might have declined but after the Fed announced interest rates remain unchaged the crude market turned around and rallied, says Joe Terranova. That’s important to note.

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GOLD

Goldended lower Wednesday, but off its session lows as the dollar extended losses after the Federal Reserve held rates unchanged and did not signal a rate hike would be imminent.

Gold has had trouble at $930 not once, but a couple times and I think its headed to $820, says Guy Adami. Look for it to go lower.


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FIRM FOUNDATION?


Sales of new homes tumbled for the sixth time in seven months in May while median prices kept plunging, underscoring the depth of the nation's housing woes. Despite the negative news Hovnanian and Beazer finished higher.

Before the industry bottoms the stocks bottom, says Karen Finerman. That’s true. But if you want to play the space make sure to stay away from companies with a lot of debt.

I'd check out K.B. Home for a trade. I think it has a few more days on the upside, adds Guy Adami.

What do you think? Did today's spike mark the bottom for homebuilders? Answer the Charles Schwab Question of the Day.
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UBS TO LAZARD: HELP! UBS


UBS, scrambling to recover from $37 billion of mortgage-market losses, has hired investment bank Lazard as an adviser to help decide which businesses should be expanded or slashed, a source familiar with the situation told Reuters.

UBS suffered some of the worst damage of the past year's global credit crunch, racking up losses as its debt traders snapped up subprime mortgages and other securities that plunged in value. These losses led to a management shake up and triggered plans to pare down the investment bank division.

In the space look at Greenhill, adds Guy Adami. It’s a lottery ticket but if it gets an M&A deal it could go substantially higher.

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BAD SEED?

Monsanto posted a higher-than-expected quarterly profit and raised its full-year forecast, but its shares fell more than 6 percent as Wall Street expressed disappointment that the company's results and outlook were not stronger.

I think indications suggest that farmers will notbe going out and buying more fertilizer after the floods in the Midwest, says Joe Terranova. I’d step back a little.

I can’t get on board either, adds Karen Finerman, not at the current valuation.

I expect to see a continued pull back, adds Guy Adami, but I still think it’s a long-term buy.

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MA' BELL'S MOJO?


Sanford C. Bernstein gives with one hand and takes with the other. Today it boosted the rating on AT&T to "outperform" from "market-perform" noting the recent weakness in the top U.S. phone company's shares provided an attractive entry point but cut its price target by $2 to $42 to reflect the broader pullback in the equity markets.

I like this stock, says Guy Adami. It's a buy here with a stop about 5% on the downside.















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