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Stock Market Update for 09/22/2010

September 22, 2010

Stocks are seeing another lackluster start to trading on Wednesday after ending the previous session mixed. The lack of significant movement comes amid a lack of first-tier economic data and as traders continue to digest the latest commentary from the Federal Reserve.

The major averages have moved to the downside in recent trading and are currently all in the red. The Dow is down 15.70 points or 0.1 percent at 10,745.33, the Nasdaq is down 16.13 points or 0.7 percent at 2,333.22 and the S&P 500 is down 3.58 points or 0.3 percent at 1,136.20.

Tuesday afternoon, the Federal Reserve announced its decision to keep interest rates at record lows, as was widely expected, while the central bank also noted that it is prepared to provide additional accommodation if needed to support the economic recovery.

Many have been speculating that the next available step in quantitative easing is to renew the purchase of long-dated government bonds.

In other news, the White House announced that Lawrence Summers, the director of President Barack Obama’s National Economic Council, will be stepping down before the end of the year.

Summers, who is the chief White House advisor to the President on the development and implementation of economic policy and leads Obama’s daily economic briefing, will return to his post at Harvard University, the White House said.

On the corporate front, software giant Microsoft Corp. (MSFT) announced that its board approved a 23 percent increase in its quarterly dividend or an increase of $0.03 to $0.16 per share. Nonetheless, shares of Microsoft are moving lower on the news, slipping by 2.5 percent.

In earnings news, General Mills Inc. (GIS) reported adjusted first-quarter net income that edged out estimates, while its net sales fell short of expectations.

After the markets closed for trading in the previous session, publishing and design software maker Adobe Systems (ADBE) said its third quarter profit rose 69 percent from last year, exceeding analysts’ expectations. However, the company provided disappointing fourth quarter guidance.

Business service provider Cintas Corp. (CTAS) said that its first-quarter profit increased 13.5 percent over last year, due mainly to the absence of a litigation charge that impacted year-ago results. Quarterly earnings came in ahead of analysts’ expectations, as did revenue.

Due to its share buyback program, Cintas raised its earnings outlook for fiscal year 2011 while reiterating its revenue forecast.

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