* Target calculation: 1350 + ( 1350 – 1100 ) = 1600

Nasdaq 100 Index similarly displays a bearish divergence on 21-day Twiggs Money Flow but no major deviation on the 13-week indicator, suggesting a secondary correction to the long-term rising trendline.

* Target calculation: 2400 + ( 2400 – 2050 ) = 2750

Bellwether transport stock Fedex, however, displays a stronger bearish divergence, on 13-week Twiggs Money Flow. Failure of support at 88.00 would indicate reversal to a primary down-trend; follow-through below 86.00 would confirm. A Fedex down-trend would warn that economic activity is slowing.

* Target calculation: 2400 + ( 2400 – 2050 ) = 2750

The S&P 500 followed through after its breakout above 1370, signaling continuation of the primary up-trend. Expect retracement to confirm support at 1350 before an advance to our target of 1450.

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 exceeded its initial target of 2650, now revised to 2750, and is due for a correction. Bearish divergence on 21-day Twiggs Money Flow indicates medium-term selling pressure. Expect a test of support at 2400.

* Target calculation: 2400 + ( 2400 – 2050 ) = 2750

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 reached its initial target of 2650 and is due for a correction. Bearish divergence on 21-day Twiggs Money Flow indicates medium-term selling pressure. Expect retracement to test support at 2400.

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

Dow Jones Transport Index has retraced over several weeks to test support at 5000. Respect would signal another attempt at 5600, while failure would indicate that momentum is slowing.

* Target calculation: 5000 + ( 6000 – 4500 ) = 5500

* Target calculation: 12200 + ( 12200 – 11200 ) = 13200

The S&P 500 displays a strong primary up-trend on 63-day Twiggs Momentum. Breakout above 1370 would complete the picture, offering a medium-term target of 1450*.

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 is building up a head of froth and is due for a correction to test support at 2400. Breach of the secondary rising trendline would give an early warning. Bearish divergence on 13-week Twiggs Money Flow continues to warn of long-term weakness.

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

Bellwether transport stock Fedex continues in a primary up-trend, though rising oil prices could spoil the party. Respect of the rising trendline would reinforce the up-trend.

Bear in mind that we are experiencing a lot of window-dressing ahead of the November election. The Fed is suppressing long-term interest rates, making stocks a more attractive alternative (the lesser of two evils). While ECRI’s Lakshman Achuthan points out that retail sales, the true driver of economic recovery, remain soft. There are some positive signs, however, so follow the rally by all means — but with caution. This is not another massive bull market like the 1990s. Not without a strong rise in debt levels — which is most unlikely. Markets will remain risk-averse for most of this decade — as long as it takes to clean up the mess.

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

The S&P 500 encountered short-term resistance at 1370, indicated by declining 21-day Twiggs Money Flow, but the primary up-trend appears healthy. Retracement that respects support at 1300 would signal trend strength — even better if we have a narrow consolidation below the resistance level.

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

So we quickly reviewed all the charts in the Nasdaq 100 Index and selected 6 companies that stand out.  What to we mean by “stand out”?  We have a saying, if you hold up these model price charts three miles away and we collectively say, “buy” these investment ideas “stand out” from the rest of the pack.  From past experience, investing gets real easy when we ask ourselves this simple question.  If one has to “squint” at the chart to make an investment case then the odds of a winning position are reduced considerably.  Also these stocks certainly qualify to be the “picks and shovel” stocks people were referring to 12 years ago.

Some observations before we get to the companies themselves.

1               In past blogs we have reviewed several social media equities and have noted these companies trade at EBV+7, 8, and 9.  This is a very high multiple to book.  This is reasonable if growth continues as it has in the past.  However, if growth slows, investors will suffer big losses as multiples shrink, probably quickly.  The companies highlighted in this blog trade at EBV+3,4 and 5.  Big difference.

2               The selected equities are all trading either at their model price or under.  Some of these companies trade at a discount of more than 30 percent of their model price or fair market value.

3               For fun, we will highlight what valuation these companies traded back in ’99 and ’00.  Yes, these companies traded back in’99 – ‘00 where the social media stocks trade today even though they were considered “old” technology.  We have the database; we may as well use it!

In no particular order:

A) Apple Computer (AAPL)

We think we have blogged enough about Apple see:

i) Apple – Model Price Update – Next area of Resistance is $600

ii) Apple – Four Actions Management Can Do to Double Their Stock Price (Without Breaking a Sweat)!

Apple with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

Looking back to the ’99-’00 period Apple only traded at the EBV+6 level, which was considerably less than today’s price.  Even though the valuation level wasn’t excessive compared to the others we will list, shareholders were still hurt in the ’00 – ’01 period.  (AAPL shares fell to EBV).

B) Microsoft Corp. (MSFT)

We have written a blog post on MSFT recently see here.

Microsoft with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

In the ’99 – ’00 period MSFT traded at EBV+9.  If MSFT traded at EBV+9 level today the stock would be trading at $ $154 per share.

C) Intel Corp. (INTC)

Intel with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

In the ’99 – ’00 period INTC traded at EBV+8.  If INTC traded at EBV+8 level today the stock would be trading at $ $133 per share.

D) Cisco Systems (CSCO)

Cisco with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

In the ’99 – ’00 period CSCO traded over EBV+9.  If CSCO traded at EBV+9 level today the stock would be trading at $ $180 per share.

E) Oracle Corp. (ORCL)

Oracle with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

In the ’99 – ’00 period ORCL traded at EBV+10.  If ORCL traded at EBV+10 level today the stock would be trading at $ $342 per share.

F) Dell Inc. (DELL)

Dell with weekly price bars, EBV Lines (colored lines) and model price (dashed line)

In the ’99 – ’00 period DELL traded at EBV+10.  If DELL traded at EBV+10 level today the stock would be trading at $ $231 per share.

WE ARE NOT SAYING THESE ARE OUR TARGET PRICES ON THE ABOVE EQUITIES BY LOOKING AT THEIR RESPECTIVE VALAUTIONS BACK IN ’99 – ’00.  We just thought it would be fun to compare oranges to oranges what valuations were like 12 years ago on these companies.  Context.  We hardly see any historical perspective in the financial press, so when we have the opportunity we like to add it!

* Target calculation: 12300 + ( 12300 – 11200 ) = 13400

The S&P 500 displays similar weakness on 13-week Twiggs Money Flow, but rising 63-day Twiggs Money Flow indicates trend strength. Breakout above 1370 would indicate an advance to 1450*.

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 made a strong breakout above 2400, indicating a primary up-trend. Expect a retracement to test the new support level (2400); respect would confirm the up-trend.

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

Dow Jones Industrial Average broke resistance at 12800, joining the Nasdaq 100 above its 2011 high. All four major indices display a primary up-trend, collectively signaling a bull market. Rising 13-week Twiggs Money Flow indicates medium-term buying pressure on the Dow and target for the initial advance is 13400*.

* Target calculation: 12300 + ( 12300 – 11200 ) = 13400

The S&P 500 is a little way behind, but rising 13-week Twiggs Money Flow indicates buying pressure. Breakout above 1370 is likely to confirm an advance to 1450*.

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 index followed through above 2500, confirming the primary up-trend, while rising 13-week Twiggs Money Flow indicates medium-term buying pressure.

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

Dow Jones Transport Average is also in a primary up-trend; and headed for a test of resistance at 5600. New highs on 13-week Twiggs Money Flow indicate long-term buying pressure.

* Target calculation: 5000 + ( 5000 – 4500 ) = 5500

The Nasdaq 100 displays a similar bearish divergence on 13-week Twiggs Money Flow, warning of strong selling pressure. Retreat below 2400 would indicate a bull trap.

* Target calculation: 2400 + ( 2400 – 2150 ) = 2650

The S&P 500 has not yet reached its 2011 highs but retreat of 13-week Twiggs Money Flow below zero would warn of strong selling pressure and a primary trend reversal.

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The signal was confirmed by similar breakouts on Dow Industrials and the Nasdaq 100, the latter offering a target of 2750*.

* Target calculation: 2400 + ( 2400 – 2050 ) = 2750

Dow Transportation Index has also completed a higher trough, signaling a primary up-trend. 63-day Twiggs Momentum recovery above zero strengthens the signal.

* Target calculation: 5050 + ( 5050 – 4550 ) = 5550

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

The Nasdaq 100 is also testing resistance, at 2400. Rising 63-day Twiggs Momentum and 13-week Twiggs Money Flow both suggest an upward breakout, which would offer a target of 2800* for the initial advance.

* Target calculation: 2400 + ( 2400 – 2000 ) = 2800

Treasury yields are falling, indicating a flight to safety. Uncertainty in Europe and China is likely to hurt the market and we should only accept bull signals if they have strong confirmation.

Narayan murthy born on 20 August 1946 and he completed his engineering in university of mysore ,Karnataka and  he completed his M.Tech (electrical)from the Indian Institute of Technology ,Kanpur. He was awarded the Padma Vibhushan , the country’s second-highest civilian award after the Bharat Ratna in 2008.

It started with a 10*10 room with a capital investment of just Rs 10000/- But now, its revenues have grown to Rs 27000 crore . and Infosys has a famous training center in mysore . every employee initially they get training from mysore  for 3 to 6 months and later they are shifted to different branches

In 2006 Infosys become the fist Indian company to be added to the NASDAQ-100 index. Infosys BPO is the first company in India and third globally

• 1981: Infosys Technologies Ltd. is founded in Bangalore, India, by N.R. Narayana Murthy and seven other software engineers.
• 1987: Infosys opens its first U.S. office.
• 1992: Infosys becomes a public limited company in India.
• 1993: Company issues stock through public offerings on three stock exchanges in India.
• 1999: Infosys becomes the first India-based public company to be listed on an American stock exchange, the NASDAQ.

Infosys Technologies Ltd. Is a software development company with headquarters in electronics city, Bangalore,India, an area known as India’s Silicon Valley for its concentration of high-tech multinational and Indian companies

Naryan murty step down his position or he said goodbye on August 2011. He achieved a lot by 20 years Infosys become a number  one company in India.

Presently  new chairman of the company  :- Mr.KV Kamat, CEO:-  SD Shibulal and Gopalakrishnan  is  present co-chairman of Infosys.

Sujatha

I MCA

* Target calculation: 12300 + ( 12300 – 11200 ) = 13400

The Nasdaq 100, however, displays a large bearish divergence on 13-week Twiggs Money Flow, warning of selling pressure. Reversal below 2040 would confirm a primary down-trend. Breakout above 2400 is less likely, but would suggest an advance to 2800*.

* Target calculation: 2400 + ( 2400 – 2000 ) = 2800

* Target calculation: 1300 + ( 1300 – 1150 ) = 1450

Dow Jones Industrial Average, however, displays short-term resistance between 12000 and 12300 on the daily chart. Reversal of 21-day Twiggs Money Flow below zero would warn of rising selling pressure.

* Target calculation: 12300 + ( 12300 – 11200 ) = 13400

Nasdaq 100 Index is headed for resistance at 2400. Upward breakout would offer a target of 2750*. Bearish divergence on 13-week Twiggs Money Flow warns of selling pressure, but breakout above the descending trendline would negate this.

* Target calculation: 2400 + ( 2400 – 2050 ) = 2750

* Target calculation: 1100 – ( 1300 – 1100 ) = 900

NASDAQ 100 index is similarly headed for the band of primary support between 2000 and 2050. Bearish divergence on 13-week Twiggs Money Flow warns of strong selling pressure. failure of support would signal a primary decline to 1600*.

* Target calculation: 2000 – ( 2400 – 2000 ) = 1600

Dow Jones Industrial Average monthly chart shows the index testing medium-term support at 11000. The 63-day Twiggs Momentum peak below zero again warns of a primary down-trend. Breach of support would test the primary level at 10400; and failure of that level would remove any doubt regarding a bear market.

* Target calculation: 10400 – ( 12300 – 10400 ) = 8500

* Target calculation: 2000 – ( 2400 – 2000 ) = 1600

Dow Jones Industrial Average broke out below its recent pennant, warning of another test of primary support at 10600. Breach of support at 11600 would confirm the signal. Reversal of 63-day Twiggs Momentum below its recent lows (-4%) would complete an “iceberg” — with the indicator just peaking above the zero line — indicating a primary down-trend.

* Target calculation: 10600 – ( 12200 – 10600 ) = 9000

* Target calculation: 2400 + ( 2400 – 2000 ) = 2800

The Dow Industrial Average is consolidating below 12300. Rising 21-day Twiggs Money Flow indicates medium-term buying pressure. Breakout above 12300 would offer a target of 12800*. Failure of support at 11600 is less likely, but would mean another test of primary support at 10600.

* Target calculation: 12200 + ( 12200 – 11600 ) = 12800

The S&P 500 is similarly consolidating between 1220 and 1300. Expect strong resistance at 1350.

Comparing to early 2008, the S&P500 displays a similar pattern, with the index testing resistance at 1400. We are close to a watershed: reversal below medium-term support (1220) would be a strong bear signal, while follow-through above recent highs would dispel fears of another bear market.

* Target calculation: 11600 + ( 11600 – 10400 ) = 12800

The S&P 500 is also testing medium-term support, this time at 1220. Respect would signal an advance to the 2011 high, while failure would re-test 1100. In the long-term, breach of 1100 would offer a target of 900* and breakout above 1350 would signal an advance to 1600.

* Target calculation: 1100 – ( 1300 – 1100 ) = 900

Bullish divergence on the Nasdaq 100 indicates strong buying pressure and a likely reversal. Breakout above 2440 would signal an advance to 2800*. Reversal below 2300 is less likely, but would warn of another test of primary support at 2000.

* Target calculation: 2400 + ( 2400 – 2000 ) = 2800

- – - 

We have selected a dozen leading asset indicators in order to determine the level of ”Risk” appetite in the Global Capital Markets.

Technology

• Apple (APPL) - Strong
• Google (GOOG) - Neutral
• NASDAQ 100 Index Tracking (QQQ) - Weak
  

Emerging Markets

• Brazil iShares (EWZ) - Weak
• Shanghai Index $SSEC - Weak

• Caterpillar (CAT) - Weak
• Cummins Engine (CMI) - Weak
• ISM Manufacturing Index (NAPMPMI:IND) - Weak
• St. Louis Industrial Production Index | Bloomberg chart - Strong
  

• St. Louis Fed Housing Starts – Weak
• S&P Homebuilders Index (XHB) | Housing Sector Index - Weak
• S&P Case Shiller Home Price Index (SPCS20:IND) - Weak

Click here for additional charts on GDP, Housing, Manufacturing, Employment, Retail Sales, Personal Income and Corporate Profits

Additional leading economic indicators can also be found at the Financial Forecast Centre.

Macro Observation

• Economic indicators and sentiment is mainly bearish which would indicate there’s not too much downside left in this market for the short-term unless indicators begin to roll over again in which case, we could see a massive collapse/bear market emerge.

Macro Status

• Neutral.

Macro Trends News

• Termination Patterns Are Brewing In Brazil, Russell 2000, And S&P 500
• Brace Yourself. The US is Turning into Japan

- – -

FIND OUT WHAT TRADES WE ARE ON

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Cognizant Technology Solutions India Ltd (CTS) (www.cognizant.com)

Cognizant is a leading provider of information technology, consulting and business process outsourcing services. A member of the NASDAQ-100 Index and S&P 500 Index, Cognizant is a Forbes Global 2000 company and is ranked among the top information technology companies in BusinessWeek?s Info Tech 100, Hot Growth and Top 50 Performers listings.

Read more

Apple’s representation will be reduced to 12.33 percent of the index on May 2, from 20.49 percent, Nasdaq OMX Group Inc. said in a slide show on its website today, after previous rules caused its weighting to grow disproportionately. The amount of the measure allotted to Microsoft Corp. and Oracle Corp. will more than double.

Apple’s weighting in the gauge is currently more than six times that of the second-biggest constituent, Redmond, Washington-based Microsoft, while its market value is only 46 percent larger, according to data compiled by Bloomberg. Rules that adjusted members relative to their respective position in the index caused stocks to lose their “alignment in relation to their actual market capitalizations,” the presentation said.

“This would probably affect international funds, given that Apple is such a big company globally,” said Tim Schroeders, a Melbourne-based money manager at Pengana Capital Ltd., which manages about $1 billion. “Passive funds in particular will be forced to re-weight into those stocks that have had increases in weightings, and in the short term we will see some selling pressure on Apple.”

Cupertino, California-based Apple dropped 1 percent to $337.77 at 9:44 a.m. in New York. The Nasdaq-100 slid 0.2 percent to 2,328.85.

Apple has become the world’s most valuable technology company as consumers snap up gadgets including the iPhone and the iPad tablet computer. While analysts estimate the company can keep posting sales growth of more than 50 percent in the next two years, founder Steve Jobs’s medical leave since January as he battles a rare form of cancer has raised concern future products may lack the edge of previous offers.

The market capitalization of Apple has jumped to $332 billion from $2.1 billion in 1998, according to Bloomberg data, as net income surged to $14 billion from $309 million. Alan Hely, a spokesman for Apple in London, declined to comment when contacted by Bloomberg News today.

Exchange-traded funds and mutual funds tracking the Nasdaq- 100 will have to sell Apple shares to account for the changing makeup of the index. Managers of the Powershares QQQ Trust, an ETF that attempts to mirror the gauge, will have to sell about $2 billion worth of shares in the company to adjust for the change, according to Bloomberg calculations.

The changes will make the Nasdaq-100 a more attractive measure of U.S. equities, according to Jacques Porta, who helps oversee about $400 million in stocks at Ofi Patrimoine in Paris.

“It’s no good to have your fund benchmarked to an index where so much is concentrated” in one stock, he said. “You cannot manage risk if there is no diversification, especially if volatility increases.”

The weighting for Microsoft, which has a market value of $214.7 billion, will be increased to 8.32 percent, the Nasdaq slides showed. Oracle’s will be lifted to 6.68 percent from 3.32 percent. Microsoft climbed 2.2 percent to $26.11 in New York trading, while Oracle advanced 0.3 percent to $34.25.

The representation of Cisco Systems Inc., the San Jose, California-based supplier of data networking products, will be boosted to 3.66 percent from 1.56 percent. Intel Corp. will be raised to 4.2 percent from 1.75 percent. Cisco gained 1.1 percent to $17.24 in pre-market trading while Intel rose 1.2 percent to $19.73.

Qualcomm Inc. fell 0.7 percent to $52.74. The world’s largest producer of mobile-phone chips will have its weighting reduced to 3.48 percent from 5 percent, the slides showed. The representation of Starbucks Corp., the world’s biggest coffee-shop operator, will drop to 1.08 percent from 1.79 percent. The shares slid 1.3 percent to $36.25.

In total, 82 of the 100 index securities will drop in weight, the presentation said.

Bloomberg.com

Can you watch the market every day? If not, you should invest, rather than speculate. Without a doubt indexing is the way to invest. The crash of 2008 has not only highlighted the risk of owning single stocks, but also exposed the dirty underbelly of actively managed mutual funds.

Going for the index avoids getting stuck with the stocks that might be left behind. If you believe in the concept of diversification, then single stock risk is just too huge of a risk to take. And while you might be able to buy 20 stocks and build out a nice portfolio, one bad stock can wipe out 5% of your portfolio and two bad stocks decimate the fund. (Get it? Decimate? Remove 10%. Ok, moving on. …)

If you want to own financials, 30 are better than two stocks. If the two financials you owned last year were Bear Stearns and Lehman Brothers, you, my friend, have completely lost your portfolio of financials, and maybe your entire portfolio. Buying an index fund tracking the financial sector of the S&P 500, such as the Financial Select Sector SPDR (XLF), gives you 80 stocks, about 11% of the S&P 500. You can get more exposure to one narrow niche of the market and diversification at the same time, hence less risky. Sure, the financials took a hit, but considering most of them are still in business, you still have some of your investment.

So, single stock risk is out if you’re not buying for dividends. But what about actively managed mutual funds? The whole point of the actively managed fund is to give you, the investor, alpha, those extra percentage points of return that comes from the fund manager’s skill and intellect. The financial crisis has shown how hard it is to find true alpha.

It’s pretty much common knowledge these days that only about 20% of active fund managers beat the major market benchmarks. Considering many active funds are essentially index fund copycats, you will never beat the market with their huge management fees. Fund managers counter that even if they don’t beat the market going up, they at least have the ability to post narrower losses on the way down, because they can sell off the worst performing sectors while the index can’t. I think a little bit of research will show they are also posting returns worse that the indexes on the loss side as well.

And even those that don’t post worse losses, is a 35% loss that much of an improvement over a 37% loss?

So, if you eliminate single stock purchases and actively managed funds, deductive reasoning says you must go with the index. Of course, this mostly applies to U.S. equities. In some markets, such as emerging markets, a smart manager might have some market knowledge that hasn’t disseminated widely, but in the U.S. that kind of information gets spread around pretty quickly.

Indexes can be volatile and risky. If the stock market falls, an index tracking the stock market will fall. However, with the index fund you can rest in the knowledge you matched the market and didn’t do worse than most of the market.

If you really want a lesson, John Bogle, the inventor of the index mutual fund, explains why indexing is better than stock picking in “The Little Book of Common Sense Investing.” Essentially, Bogle says you can maximize returns and lower risk by not buying single stocks but mutual funds. Followers of Bogle have written a book called “BogleHeads” which expands on this theme.

Now in a shameless plug for myself, my book ETFs for the Long Run takes Bogle’s argument one step further. I agree with Bogle that indexing is the way to invest. Bogle likes the mutual fund structure, but I think Exchange Traded Funds are the mutual fund for the 21st century. In the book, I explain indexing, the advantages of buying mutual funds instead of single stocks and then why ETFs are better than mutual funds. The key reasons being they are cheaper, more tax efficient, more transparent and more flexible. I also explain how to buy and sell ETFs and how to use them to build a portfolio.

Since you don’t know what sector of the market will rise, you should own a broad market index, such as the Vanguard 500 mutual fund, (VFINX), or buy an ETF such as the SPDR, (SPY), or the iShares S&P 500 Index (IVV). The Diamonds Trust (DIA) tracks the Dow Jones Industrial Average and the PowerShares QQQ (QQQQ) follows the technology heavy Nasdaq 100 index. The Vanguard Total Bond Market (BND) is a broad bond index.

Then you break it down into sector specific indexes that you want to follow.

Finally, you need to watch fees. ETFs typically charge smaller expense ratios than mutual funds. However, if you are dollar cost averaging, which in this market is the only way to go, the ETF’s commission will significantly eat into your returns if you invest less than $1,000 a pop. If you are investing less than $1,000 a pop, then go with a no-load index fund. Buying an index fund with a load is like paying for your own security in a gated community. It’s a waste of money.

U.S. stock-index futures advanced on speculation the Federal Reserve will cut its main interest rate to a record low and channel credit to businesses and consumers to halt the worst recession in a quarter century.

General Electric Co., the world’s biggest maker of power- generation equipment, climbed 2.1 percent and Microsoft Corp., the largest software company, added 1.3 percent as traders bet the Fed will cut its benchmark rate to as low as 0.25 percent. General Motors Corp. rose on optimism the Treasury may adopt a plan to save the car industry, while Goldman Sachs Group Inc. gained 1.9 percent even after posting a wider-than-estimated fourth-quarter loss.

Standard & Poor’s 500 Index futures expiring in March added 1 percent to 880.6 at 9 a.m. in New York. Dow Jones Industrial Average futures gained 61 points, or 0.7 percent, to 8,642 and Nasdaq 100 Index futures increased 0.7 percent to 1,203.5.

The Fed’s Open Market Committee will announce its decision on interest rates and monetary policy at around 2:15 p.m. in Washington. The announcement comes after the first simultaneous recessions in the U.S., Europe and Japan since World War II dragged the S&P 500 down almost 45 percent from its 2007 record.

“There won’t be a negative surprise,” said Jacques Porta, a fund manager at Ofi Patrimoine in Paris, which oversees $615 million. “What will be interesting and very important is the discourse. Bernanke has given signals that he will innovate in terms of monetary policy since there isn’t much room left for further rate cuts.”

U.S. stocks fell yesterday, wiping out last week’s gains, after manufacturing showed a worsening economy that analysts said will hurt earnings.

Consumer Prices Slide

The cost of living in the U.S. fell in November by 1.7 percent, the most since record-keeping began in 1947, the Labor Department said. Excluding food and energy, so-called core prices were unchanged from a month earlier.

GE climbed 2.1 percent, while Microsoft added 25 cents to $19.29.

GM, the biggest U.S. automaker, added 2.7 percent to $4.19. The Treasury may adopt a plan that would let a car czar or the Treasury Secretary force GM and Chrysler LLC into bankruptcy if the automakers don’t show they can survive without government aid, a U.S. senator said.

GM and Chrysler would be required to submit viability plans by March 31 or lose any further U.S. support, Carl Levin, a Democrat from Michigan, told reporters in Detroit. The Treasury plan would resemble a measure passed by the U.S. House last week that was rejected by the Senate.

Goldman’s First Loss

Goldman added $1.94 to $68.40. The loss of $4.97 a share in the three months ended Nov. 28 was the company’s first quarterly deficit since going public in 1999. It compared with net income of $3.22 billion, or $7.01, in the same period a year earlier, the New York-based company said. The average estimate of 18 analysts surveyed by Bloomberg was for a loss of $3.73 per share.

Some fertilizer companies rallied after the shares were upgraded to “buy” at Merrill Lynch & Co., which said “fundamentals are nearing a bottom.”

Potash Corp. of Saskatchewan Inc., the world’s largest crop-nutrient producer, rallied 4.5 percent to $72.35. Mosaic Co., the world’s largest producer of phosphates, gained 5.1 percent to $33.06, while Terra Industries Inc., the biggest U.S. maker of liquid-nitrogen fertilizer, added 7.5 percent to $15.83. Intrepid Potash Inc., the largest producer of the crop nutrient in the U.S., rose 8.5 percent to $20.25.

Best Buy Forecast

Best Buy Co. climbed 9 percent to $25.59 after affirming its full-year earnings forecast and reporting third-quarter profit, excluding some items, of 35 cents a share, beating the average analyst estimate by 49 percent. The U.S. consumer electronics chain also said it’s offering voluntary severance packages to almost all workers as part of a “significant” cost-cutting plan.

Exxon Mobil Corp., the world’s biggest publicly traded oil company, advanced 40 cents to $80.35. Crude oil rose, erasing earlier losses, after Venezuela’s oil minister said OPEC will reduce production by at least 1 million barrels a day in an effort to stem the 70 percent plunge in prices from July’s record.

Gilead Sciences Inc., the leading maker of AIDS treatments, climbed 2 percent to $45.27. Merrill Lynch & Co. raised its recommendation on the stock to “buy” from “neutral.”

The S&P 500 is poised for its worst year since the Great Depression after losses and writedowns at the biggest global financial companies reached almost $1 trillion and earnings at U.S. companies dropped for five straight quarters, matching the longest streak on record.