Market Wrap-Up for Sept.14 (WDC, CLF, STI, MET, CBRL, more)

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It was the day after the big Fed announcement and more money came running into the markets, despite the recent big run we've already seen. Traders tend to get jumpy whenever a rally appears to be getting away from them.

Look no further than the move we have seen in a stock like Cliffs Natural Resources ( CLF ), which is up from $34 just ten days ago, to the current $45 plus price level. Financials also continue to gain some Wall Street support as we saw further upgrades in names like SunTrust Banks ( STI ) and MetLife ( MET ). Speaking of insurers, one wonders how they will attempt to pay the guaranteed rate of returns promised through vehicles like annuities. The downside of continued low interest rates must be putting the folks running insurer portfolios in quite a state these days.

Elsewhere, new dividend payer Western Digital ( WDC ) followed its main competitor Seagate Technology ( STX ) in warning about the company's revenue outlook. Lastly, a cautious note out of a Wall Street analyst had shares of Cracker Barrel ( CBRL ) in the red heading into the company's earnings release next week.

When Will the Federal Reserve Stop Intervening in the Markets?

This is the biggest question I get asked after Fed days like we saw yesterday. The answer to this query might be pretty obvious. My guess is the Fed will let off the gas the moment the stock market stops reacting positively to announcements of further accommodation. Then and only then will Bernanke & co. pivot and try another quick fix.

It's very easy for me to temper my excitement since our focus tends to remain on company fundamentals. We enjoy seeing the price gains for stocks we like, but would prefer getting back to the regular rhythm of how markets are supposed to work (sans the steroid-like effect of money printing).

Just today we got the CPI (Consumer Price Index) number showing inflation being fairly non-existent. Once again, we shake our heads at this number, as reality tells a very different story. You have to love the ex-food and ex-energy costs totals - not only have food and gas prices continued to rise, but these are two of the very biggest regular expenses that everyday people face.

Still, it certainly doesn't pay to fight the trend and sit on the sidelines watching the buying power of your savings deteriorate. Regardless of the market environment, investors should stay the course of building wealth by putting money to work regularly in income-producing assets. That's the only way to stay ahead of the inflation monster lurking wherever our spending is needed.

Another area of concern for me is how well the job market can possibly pick up if we see commodities spike the way they have been. Don't look now, but we are back to the $100 a barrel for oil again. We all know rising commodity costs are detrimental to most businesses. These higher prices either need to be passed on to consumers or eaten by the businesses themselves. If companies choose to eat the costs, they'll need to run leaner operations, which means less hiring, more firing, and keeping salaries on a tight leash.

There will, of course, be winners and losers from the fallout of the latest Fed decision. Stay tuned, and we'll keep you focused on how you can avoid being on the wrong side of the equation.

A Look to Next Week and a Weekend Preview

Looking ahead to next week, third quarter earnings will continue to be very light, but we will get results from companies such as Conagra Foods ( CAG ), Oracle Corp ( ORCL ), and Cracker Barrel ( CBRL ). The focus will also continue to be on the economic data as well as the latest Wall Street analyst calls.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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This article appears in: Investing Stocks
Referenced Stocks: CAG , CBRL , CLF , MET , ORCL

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