Markets in Limbo for Fed and Europe

Markets and major index ETFs paused yesterday as the S&P 500 lowered .1%, the Dow Jones lowered .26%, the NASDAQ ticked up .09% and the Russell 2000 increased .67%.  Major index ETFs reacted in the same fashion as the SPDR S&P 500 ETF (NYSEARCA:SPY) dropped .09%, the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) dropped .3%, the PowerShares QQQ Trust, Series 1 ETF (NASDAQ:QQQ) gained nearly 1%, and the iShares Russell 2000 Index ETF (NYSEARCA:IWM) gained .46%.

Major markets and major index ETFs likely stood in limbo Monday and yesterday as investors anticipate the Fed meeting today and a Greece private debt solution; both events have significant economic ramifications no matter the outcome.

Dr. Bernanke and his Fedsters are holding their standard FOMC Meeting today, however the real stickler is Dr. Ben’s press conference afterwards, in which the Feds will disclose their short term interest rate plans AND the projected dates to raise interest rates again.  Rumors surrounding the date of the first rate hike are as far out as July 2014, which would be historic by any account.

Greece is now back in the spotlight but definitely not in vogue, as officials and Grecian private bond holders continue haggle over how much debt to write down.  If an agreement does not come to pass, Greece will default in March, and currently talks about writing down debt have stalled.  Meanwhile, Chancellor Merkel has apparently accepted a higher IMF bailout fund under the condition of tighter debt controls in the European Union.  Not surprisingly, Europe ETFs dropped yesterday on this continuing drama.

Let us also not forget the US versus Iran “nuclear-weapons-close-Strait-of-Hormuz” issue which has yet to resolve itself; oil (NYSEARCA:USO) dropped .50% yesterday and closed at just over $99 per barrel.  Our precious gold also dropped .65% yesterday to $1664.5 per ounce, most likely in anticipation of Dr. Ben’s speech.

And lastly, at the time of this writing, Apple Inc, (NASDAQ:AAPL) released its fourth quarter 2011 results; the tech company’s profit jumped 73% compared to Q4 of 2010.  I would expect a huge surge today for tech ETFs including the Technology SPDR ETF (NYSEARCA:XLK) and the PowerShares QQQ Trust, Series 1 ETF (NASDAQ:QQQ).

Bottom Line: Major indices and index ETFs stand in limbo as investors await today’s Fed news and a Grecian-Euro solution.   The tech sector should also pop today, as Apple (NASDAQ:AAPL) always makes a large splash.

Disclaimer: Wall Street Sector Selector trades a wide variety of ETFs and positions can change at any time.