Stock market bulls were pressing their advantage as the investors wait for the FOMC decision due out around 2:15 p.m. this afternoon. Elsewhere the Treasury department held a record-setting $40 billion auction for five-year notes. The Mortgage Bankers Association (MBA) reported that applications were up. A surprise jump in oil inventories sent crude oil plunging, which produced a drag on the energy sector.

Asian markets were down with profit taking accelerating in the Chinese Shanghai index, which was off another 1.9%. The Hong Kong Hang Seng gave up 0.49%. The Japanese markets are still closed and will reopen tomorrow after a five-day holiday.

European markets closed fractionally lower. Most of them were in positive territory this morning thanks to encouraging economic data. A hybrid index of for the EU's service and manufacturing sectors posted its second month of above 50.0. Economists were expecting a rise from 50.4 in August to 51.3 in September. Unfortunately September's reading came in at 50.8 but investors were still happy with the positive trend as readings over 50 represent expansion. The European markets eventually turned negative as the energy sector led them lower on the weakness in crude oil futures. The German DAX lost 0.13%. The English FTSE fell 0.06%. The French CAC-40 edged down 0.05%.

Naturally the FOMC meeting is the big story today. The two-day meeting will adjourn shortly and the Federal Reserve's announcement is expected around 2:15 p.m. No one expects a change in interest rates currently held in the 0.0% to 0.25% range. The market's focus will be on the FOMC's comments and their assessment of the economic rebound.

2:20 PM UPDATE - As expected the FOMC has kept rates unchanged and offered a relatively bullish assessment of the economy. Stocks are moving higher on the news.

While on the subject of interest rates the record low rates has been a boon for refinancing. The Mortgage Bankers Association said their seasonally adjusted index of applications surged 12.8% last week. This was the highest reading since late May 2009. Fueling the move was the drop in interest rates for 30-year fixed mortgages at 4.97%. Rates are approaching their all-time low of 4.61% from last March. The mortgage applications index measures both refinancings and new mortgages. The refinancing portion rose 17.4% to its highest levels in more than three months.

Another big story today was the surprise build in oil inventories. Economists were predicting a 2.25 million barrel decline in stockpiles. The Energy Information Administration said inventories actually jumped 2.8 million barrels. The oil market reacted by selling the news and crude oil fell more than 3.6% trading back down near $69 a barrel. This has produced a bearish breakdown in the USO that could spark further selling!

Chart of the USO oil ETF:

A minor bounce in the dollar only exacerbates the problem with oil's weakness. Gold futures didn't seem to be affected with gold trading sideways near $1,014 an ounce. Copper prices are down near the bottom of their trading range.

Currently the S&P 500 index is up but only fractionally. Traders bought the dip this morning but this close to the Fed's decision all action has stopped. The NASDAQ composite is up about five points at 2151. The Dow Industrials are flirting with new highs over 9850. The small cap Russell 2000 index is actually down but only fractionally near the 620 level.

Let's take a quick look at charts for the major averages:

Chart of the S&P 500:

Chart of the NASDAQ:

Chart of the Dow Industrials:

Chart of the Russell 2000 index:

Scanning the OptionInvestor.com play list I see that ACL is in rally mode with a 2.8% gain and a rally past our first target to take profits at $142.50. ATI is also showing strength with a 1.8% gain. MTD is bouncing from the $90.00 level.