Intraday Market Update
Equities are under a bit pressure after the GOP won the House in mid-term elections yesterday, and ahead of the QE2 announcement by the FOMC this afternoon at 2:15 PM EST. All of the major US indexes continue to pause near their six month highs, which follows two months of strong gains that saw the S&P 500 and DJIA gain more than +12%, and the NASDAQ and Russell 2000 gain more than +20%. Traders appear to be taking some risk off of the table ahead of today's FOMC announcement as the major indexes are posting -0.25% to -0.50% losses. Crude oil briefly popped over $85.00 per barrel for the first time since its May 3rd/4th highs but has since bounced around between $84.00 and $85.00. Gold and other precious metals fell sharply at the open as traders position themselves for today's QE2 announcement. Gold was down -$30.00 in early trading but has since recovered some of its losses for a daily decline of nearly -1.50%. Silver was down more than -3% but it has also recovered some of its losses for a -1.60% decline on the day. Overseas, the Asia-Pacific region closed with solid gains with the exception of China which closed -0.47% lower. European markets had a late day sell-off to close firmly in the red.

Today's economic data was relatively strong highlighted by a much better than expected ADP employment report, an ISM Non-Manufacturing Index that beat estimates, and the largest increase in factor orders since January. ADP said their estimates for October private payrolls rose +43,000 compared to estimates calling for an increase of +20,000. ADP also revised their private payrolls in September higher from a decline -39,000 to a decline of -2,000. These numbers may point to strength in Friday's employment report.

Elsewhere, the ISM Non-Manufacturing Index came in ahead of estimates in a very positive sign for the pivotal service sector in the US. The index gained +1.1 points to 54.3 compared to estimates of 54.0. New orders jumped to 56.7 for nearly a +2 point gain. Backlog orders moved back over 50.0 to 52.0, employment rose +0.7 points to 50.9, and the business activity index surged almost +6 points to 58.4. Employment in the non-manufacturing sector has remained uncomfortably low in recent months, however, the strength seen in new orders, backlog orders, and business activity may translate to rising employment in the near future.

In equities, media outfit Time Warner (TWX) has lost -2% despite handily beating earnings on the bottom line and raising its full-year EPS outlook. The company said its networks businesses delivered "robust growth" in advertising and subscription revenues. AOL has gained +6% after reporting earnings that beat estimates, however, the company continues to see subscribers decline by about -25% per quarter and also warned that they are seeing domestic ad sales decline.

Health insurance names Aetna (AET) and Wellpoint (WLP) both crushed earnings estimates but are heading in different directions. AET has gained better than +2% while WLP has lost nearly -2%. Both firms improved full-year guidance. AET said its results were driven by a reduction in utilization of health care services after the surge it saw in 2009, combined with appropriate pricing and effective medical quality and cost management. CVS Caremark is flat after reporting earnings merely in-line with estimates.

Many casino stocks are doing well again today after MGM's loss (excluding charges) narrowed compared to last quarter. MGM has gained +8.5%, Boyd Gaming (BYD) has gained +6%, and Las Vegas Sands (LVS) has gained +1%. WYNN is has lost -1.3% but is well off of its lows after reporting earnings that met expectations yesterday after the bell.

Electronic Arts (ERTS) is down more than -4% despite reporting a 10 cent profit compared to an estimated 26 cent loss. Revenues also topped estimates and the company reaffirmed guidance. Garmin (GRMN) is down -7% after the company reported disappointing earnings and revenue results and lowered its 2010 guidance.

Core Sector List: Overall reading: 4 sectors advancing, 16 sectors declining
Strongest Sectors: Banks, Biotechnology, Internet
Weakest Sectors: Miners, Home Construction, Nat Gas

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