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[BRIEFING.COM] It was anticipation of, and then digestion of, today's FOMC event that dictated trade. For the fifteenth consecutive time, the Fed raised the fed funds rate by 25 basis points. As had been expected, it wasn't today's tightening that sparked selling. The rate hike, to 4.75%, had been fully expected. The catalyst was instead the accompanying policy statement. Some participants had been hoping that the Fed would signal an imminent end to the current monetary tightening cycle. The directive's diction was little changed, though, and provided no signal that rate hikes are coming to an end.

Specifically, the statement kept intact the wording that "some further policy firming may be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance." Furthermore, the statement also maintained the statement about the concern that "possible increases in resource utilization, in combination with the elevated prices of energy and other commodities, have the potential to add to inflation pressures." This does not mean that several more rate hikes are certain, but the lack of any change in the statement suggests that the FOMC is currently anticipating raising rates at least one more time, and possibly more. As the Fed has asserted, policy decisions will depend on the data.

Ahead of the afternoon release, the stock market was locked within a very tight trading range that lied close to the unchanged mark. Treasuries, on the other hand, had been on the defensive all day. Following the announcement, bonds came under increased pressure. At the time of the equity market's close, the benchmark 10-year note had fallen 18 ticks and risen to a 4.78% yield. At the back end of the curve, which is most inflation-sensitive, the 30-year note had dropped 31 ticks and jumped to a 4.79% yield. Rising yields had had a muted effect on stock trade this morning, but exacerbated conditions served as a bearish backdrop for equities. Rate-sensitive areas were especially affected. The Financial sector's 1.0% decline was driven by banks and weighed heavily. Other particularly rate-sensitive pockets, like the Utilities sector (-0.4%) and the homebuilding industry, also fell.

The FOMC event largely overshadowed surging energy prices. Crude led the advance, and closed over $66 per barrel. That move reflected an approximate 3% gain. One area that had taken notice, though, was the Energy sector. Its intra-day gain of about 1.1% had supported the indices, but the late-day, directive-driven selling took virtually all areas of the market lower. The sector maintained a gain, but it was more than halved and unable to lend much support.

Healthcare and Technology were additional areas of the market that weighed heavily. Pharmaceuticals were an especial sore spot for the former. Due to two analysts' downgrades, Eli Lilly (LLY 56.41 -2.26) was the most significant drag. Selling across the tech board was wide-spread, but semiconductors and hardware levied two of the most substantial losses. Hewlett-Packard (HPQ 32.07 -1.04) suffered from an article in The Wall Street Journal that raised valuation concerns, and that stock was the force behind the latter industry's decline.

Other than those items, today's corporate front was a light one, and it offered little deviation from the economic stage. There were reports of more job cuts at General Motors (GM 22.75 -0.18), better than expected earnings from Lennar (LEN 60.95 +0.63) and Tiffany's (TIF 38.91 +0.40), a court ruling in favor of tobacco firms, and Citigroup's (C 47.60 -0.04) expected bid for a Turkish bank, but, overall, respective areas of the market were not very much affected.

Consumer Confidence data was the other item on today's economic calendar. In March, the series checked stronger than expected and reflected the highest reading since May 2002. Additionally, the prior month's reading was revised upward. Although we have maintained that consumer spending is better previewed through the level of interest rates and income growth than sentiment readings, this strong number did not help concerns that the Fed will remain inclined to stay on its tightening path.NYSE Adv/Dec 1141/2124...Nasdaq Adv/Dec 1199/1844