The FOMC Meets Today, Plus, Here’s What Newsletter Writers Are Saying

Stocks are flat Wednesday after yesterday’s rally.

The EIA said crude inventories rose 1.1 million barrels, more than expected;
gasoline rose 300K barrels; distillates rose 1.7 million barrels, more than
expected.

The economy grew at a faster pace than originally thought. Q1 final GDP was
revised higher, to 3.8%. More new homebuilding and stronger exports were cited.
For Q4 2004, GDP also grew at 3.8%.

The FOMC begins a two-day meeting today. Economists are looking for a quarter-point
rise–to 3.25%–and no major change in the policy statement. Specifically, the
words “accommodative” and “measured pace” are expected to remain intact. It is
also quarter end and half-year end. It will be the ninth increase in the past
year.

Oracle
(
ORCL |
Quote |
Chart |
News |
PowerRating) beat by 0.03; revenue was $3.88 billion, in line.
The company cited the rapid integration of Peoplesoft and was optimistic for
2006.

Dow component AIG
(
AIG |
Quote |
Chart |
News |
PowerRating) reported Q1 earnings that beat by 0.22;
net income rose 44%. The company gave an upbeat outlook.

General Mills
(
GIS |
Quote |
Chart |
News |
PowerRating) missed by a penny; revenue fell 3%. The
company anticipates EPS growth of 7-8% on a diluted basis for 2006.

Monsanto’s
(
MON |
Quote |
Chart |
News |
PowerRating) earnings fell to 0.17 from 0.93 a year ago.

In IPO news, Footwear retailer DSW Inc. (DSW) priced at $19,
above the initial $15-$17 range. The stock is trading at 24.13.  Also
debuting today are telecommunications clearinghouse Neustar (NSR, priced
at $22) and real estate fund Deerfield Triarc (DFR, priced at $!6). NSR
is trading at 25.25 and DFR, 15.63.

Among newsletter writers, 55.1% are bullish, the highest level since
March. Bears are 19.1%, the lowest figure since December.

AAA said it expects more drivers to hit the road this July 4 weekend than did
during Thanksgiving. This, despite higher gasoline prices.

Chrysler said it will match GM’s employee discounts if GM
extends its offer into next week. The promotion is working well for GM, but some
worry that sales will drop substantially after the promotion ends..

Thomson Financial predicts the growth rate for the
S&P 500 for Q2 will be 7.1%. Most companies report mid-July.

Thursday is the end of the quarter.

Strong sectors are:  Gold
(
$HUI.X |
Quote |
Chart |
News |
PowerRating) +3.91% 
Insurance  
(
$IUX.X.X |
Quote |
Chart |
News |
PowerRating)
+1.44%   Airlines  
(
$XAL.X.X |
Quote |
Chart |
News |
PowerRating)
+0.63%  

Weak sectors are:   Oil
(
$OIX.X |
Quote |
Chart |
News |
PowerRating)
-0.53%       Disk Drives
(
$DDX.X |
Quote |
Chart |
News |
PowerRating) -0.40%      
Homebuilders  
(
$HGX.X.X |
Quote |
Chart |
News |
PowerRating)
-0.37%

Morgan Stanley upgraded Motorola
(
MOT |
Quote |
Chart |
News |
PowerRating) to overweight.

Bank of America upgraded Chevron
(
CVX |
Quote |
Chart |
News |
PowerRating) to buy from neutral.

SigmaTel
(
SGTL |
Quote |
Chart |
News |
PowerRating) guided lower, saying revenues for Q2 would be
$68-72 million, down from $86-95 million.

Symbol Tech
(
SBL |
Quote |
Chart |
News |
PowerRating) lowered guidance, and now sees 0.02 – 0.05 vs.
0.06. The company is cutting 700 jobs.

JP Morgan cut Tyco
(
TYC |
Quote |
Chart |
News |
PowerRating) from its focus list.

Petco
(
PETCE |
Quote |
Chart |
News |
PowerRating) lowered its Q2 guidance.

Calpine is selling its oil and gas assets to Rosetta for $1.05
billion.