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Last Call: The Caddyshack Rally

NYSE trader
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NYSE trader

"Buy, buy, buy! Oh, everyone's buying? Then sell, sell, sell!"

— Al Czervik, “Caddyshack”

After being up as much as 154 points, a late day sell left the Dow up 96 points. Wednesday we watch the Fed.

Market Musings By CNBC Market Guru Robert Hum

  • Stocks rally to 5-week highs ahead of Wednesday’s Fed announcement and Ben Bernanke news conference
  • S&P, Nasdaq have best 4-day winning streak this year
  • Dow, S&P, Nasdaq all close above their 50-day moving averages
  • RBOB Gasoline turns negative for the year

The Word on the Street

ADOBE EARNINGS BEAT, BUT SHARES FALL ON GUIDANCE/Reuters w/ CNBC.com: “Adobe Systems , maker of Photoshop and Acrobat software, reported a quarterly profit that beat expectations but fell slightly, as costs rose 8 percent Shares fell in extended-hours trading after the company handed in disappointing guidance for the third quarter.”

DIMON: JPMORGAN DIDN'T MISLEAD INVESTORS/Reuters w/ CNBC.com: “JPMorgan Chase Jamie Dimon told lawmakers Tuesday his bank was upfront with investors about its multibillion-dollar trading loss, even as regulators investigate whether JPMorgan disguised a dramatic rise in risk-taking.”

NOOK SEARCHES FOR ITS NICHE/WSJ – Jeffrey Trachtenberg: “Nearly three years after Barnes & Noble Inc. opened its e-book store, the retailer continues to report widening losses on its digital business as it competes with larger technology rivals such as Apple Inc. and Amazon.com Inc. Shedding light on the struggling business—on which it has bet heavily as physical book sales come under continued pressure—Barnes & Noble on Tuesday for the first time broke out results of its Nook digital business. But for some, the results weren't pretty.”

OPERATION TWIST RAISES WALL STREET'S BORROWING COST/Reuters: “Wall Street firms are finding it more expensive to fund their holdings of more than $100 billion in short-dated U.S. government securities and if the Federal Reserve doubles down on its efforts to keep long-term interest rates low, it could pinch those firms more.”

PENNEY TO TWEAK MESSAGE, BUT NOT ITS STRATEGY/WSJ – Dana Mattioli: “J.C. Penney Co. will revamp its marketing to convince customers that they are getting a deal, but its chief executive isn't backing off a strategy that has produced a steep drop in sales this year. Chief Executive Ron Johnson, who joined Penney in November after heading up retail at Apple Inc., has ditched the department-store chain's frequent sales and coupons in favor of an everyday low pricing approach that he rolled out in February. … Speaking in an interview Tuesday, Mr. Johnson said he remains committed to the strategy. "I think the strategy is working well," he said. "I'm quick to learn and quick to act, but we will not waver."

REGARDLESS OF WHAT FED DOES, MARKETS LIKELY TO BE DISAPPOINTED/CNBC – Patti Domm: “No matter what the Fed does, some corner of the financial markets will be unhappy Wednesday afternoon. n the last several weeks, as Europe’s sovereign crisis flared and U.S. economic news simultaneously worsened, the expectations on Wall Street have gone from no new Fed easing to the Fed potentially launching a new extraordinary, quantitative easing program at the end of its two-day meeting Wednesday. The consensus appears to lie somewhere in between, with the most odds seemingly on an extension of the Operation Twist program that is currently scheduled to end at month end.”

FACEBOOK STOCK CLOSES UP FOR 4TH STRAIGHT DAY/AP: “Facebook's stock has had its fourth consecutive day of gains. The stock increased 50 cents, or 1.6 percent, to close Tuesday at $31.91. That's still down 16 percent from Facebook's IPO price of $38. But now there are as many up days as down days for the stock — 11 each. Facebook began trading on May 18. Facebook's stock has traded as low as $25.52 since the IPO.”

ELAINE WYNN SEEKS COURT BACKING TO SELL WYNN SHARES/WSJ – Alexandra Berzon: “Elaine Wynn, the former wife of Las Vegas casino mogul Steve Wynn, sought permission from a federal court on Tuesday to sell her shares in the gambling company that bears their last name. The filing, made in U.S. District Court in Nevada, inserts a wild card into a fierce legal battle between Mr. Wynn and a former business partner. If Ms. Wynn is allowed to sell her shares without restrictions, it could erode Mr. Wynn's control over Wynn Resorts Ltd. Ms. Wynn owns nearly 9.7% of Wynn Resorts and is a member of the company's board. But under an agreement with her ex-husband that she linked to his soured business partnership, she is barred from selling or voting her 9.74 million shares.”

Economic Data

1230pm et FOMC Statement

1400pm et FOMC Forecasts

1415pm et Chairman Bernanke Presser

Earnings

Before the bell:

Actuant

After the bell:

Bed Bath & Beyond, Micron, Red Hat

Key Guests

Randy Kroszner, University of Chicago (630a)

Peter Evensen, Teekay CEO-Elect (650a)

Jack Welch, Fmr GE CEO (700a)

Laurence Meyer, Former Federal Reserve Governor (730a)

Peter Fisher, BlackRock Global Head of Fixed Income (800a)

Deval Patrick, MA Governor (815a)

Edward Leamer, UCLA Anderson Director (840a)

Arne Sorenson, Marriott International CEO (1000a)

William Lynch, Barnes and Noble CEO (1040a)

Bill Gross, PIMCO (1215p)

Charles Reinhard, Morgan Stanley Deputy Chief Investment Officer (1215p)

Ken Volpert, Vanguard Head of Taxable Fixed Income (1215p)

Richard Repetto, Sandler O'Neill Principal (1230p)

Vincent Reinhart, Morgan Stanley Managing Director (100p)

Kevin Plank, Under Armour CEO (315p)

Rod Beckstrom, ICANN CEO (535p)

Federic Mishkin, Fmr Federal Reserve Board Governor (700p)

Rep Peter Welch, D-VT (700p)

Newt Gingrich, Fmr Speaker of the House (700p)

Christina Romer, Fmr Council of Economic Advisors Chair (700p)

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