The markets seemed nervous ahead of the FOMC decision this afternoon with stocks slowly slipping to new relative lows. The new home sales report was a disaster. Tim Geithner is getting grilled before congress. Apple Inc. finally unveils their new tablet PC. Dollar strength (not much) is putting pressure on commodities with crude oil down 1.7% near $73.40 a barrel. Gold futures are down $12 near $1,087 an ounce.

Asian markets extended their declines. A rising yen continues to pressure the Japanese market. The NIKKEI is down five out of the last six days with a 0.7% decline today. The Hong Kong Hang Seng lost 0.38% marking its sixth loss in a row, its worst string of declines in over a year. The Chinese Shanghai index fell just over 1% for its fourth loss in a row. The Shanghai has just broken round-number support at the 3,000 level. You may recall the Hang Seng broke down under the 20,000 level yesterday.

European markets are rolling over as well. Spain's second largest bank, BBVA, reported disappointing earnings and rising loan losses. This sparked a sell-off in the banking sector. BBVA fell over 5%. The English FTSE dropped 1.1%. Both the German DAX and the French CAC-40 gave up 1.2%.

The real story today is the FOMC meeting and their announcement is due out around 2:15 p.m. Eastern. No one expects the Fed to raise rates, which are currently sitting at historic lows in the 0.0-0.25% zone. The focus will be on the Fed's commentary regarding the health of the economy. While we wait for the Fed's decision investors are being entertained by Treasury Secretary Tim Geithner who is being questioned before congress over his role in the $180 billion AIG bailout. Geithner oversaw the bailout when he was in charge of the Federal Reserve Bank of New York. There has been some discussion this week whether or not Geithner will be able to keep his job as treasury secretary.

The FOMC's announcement: no change in rates (0.0-0.25%). The Fed did keep the "extended period" language in their announcement. Their comments were mixed with both good and bad observations on the health of the economy. The biggest worries are businesses are reluctant to hire and bank lending is contracting. The pace of economic recovery is likely to be moderate. Inflation is likely to be subdued for some time. FOMC is winding down its term auction facility. There was one dissenting vote, who thought rates should rise.

This has not been a good week for data on real estate. The existing home sales report earlier was terrible. This morning the Commerce Department reported that new home sales were equally bad. Economists were expecting new home sales to come in at a 370,000 pace for December. Unfortunately the pace fell 7.6% to 342,000. According to the record books dating back to 1963, 2009 was the worst year for new home sales with a 23% drop from 2008 levels. December's sales fell 9% from a year ago. Homebuilders are reporting higher traffic but this is a very tight mortgage market making it tougher to get loans on top of a consumer that's worried about job security.

One of the best stories today is Apple Inc.'s (AAPL) new tablet PC the "iPad". AAPL's launch of this new product has been highly anticipated. Essentially the new tablet PC looks like a giant iPhone. According to CEO Steve Jobs the iPad is "so much more intimate than a laptop and so much more capable than a smart phone." The new iPad comes with a built in calender, address book, and will have a GPS map feature powered by Google. The computer weighs 1.5 pounds and has a 9.7 inch touch screen with a 10-hour battery life. iPhone users will be happy to hear that the iPad will be able to run almost all of the iPhone applications. Shares of AAPL were down earlier in the session but have bounced from the $200 level to +1.98 around $207.50.

In other news Toyota took a big hit to its image of quality after a massive recall of nearly 2.3 million vehicles. The company has actually halted sales on several models due to the gas pedal, which could stick and cause unintended acceleration. Shares of TM are down 8.7% near $79. Meanwhile Berkshire Hathaway is joining the S&P 500. Warren Buffet's Berkshire is buying railroad company Burlington Northern (BNI). S&P needs to replace BNI in the index. They are adding the "baby" Berkshires since the company is splitting the stock 50-to-1, which has brought the individual share price down toward $70. The split was supposed to happen tomorrow but it appears the split has already occurred. The class B shares are already trading at $70.27 today.

Currently the market is still weak. I'm not seeing much of a reaction to the FOMC announcement. The S&P 500 is trading near its lows around 1085, which was expected to be support. The NASDAQ is still clinging to the 2200 level. The Dow Industrials is desperately holding on to its 100-dma near 10,150. The Russell 2000 is trading near the 610 level.

Chart of the S&P 500:

Chart of the NASDAQ:

Chart of the Dow Industrials:

Chart of the Russell 2000 index:

A quick glance at the play list and I see FDX sinking 1.7% to new relative lows. MTD is sinking to new relative lows.