By Greg Peel

The Dow closed down 48 points or 0.4% while the S&P closed flat at 1341 and the Nasdaq lost 0.5%.

"Most participants saw the incoming information as indicating somewhat slower growth in total demand, output, and employment over coming quarters than they had projected in April, and most carried forward some of that downward revision to their projections of medium-term growth. However, some participants judged that the recent weakness in a variety of economic indicators was more likely to prove transitory, and thought that the outlook beyond this year was essentially unchanged.

"A few members expressed the view that further policy stimulus likely would be necessary to promote satisfactory growth in employment and to ensure that the inflation rate would be at the Committee's goal. Several others noted that additional policy action could be warranted if the economic recovery were to lose momentum, if the downside risks to the forecast became sufficiently pronounced, or if inflation seemed likely to run persistently below the Committee's longer-run objective."

My emphasis. These are excerpts from the minutes of the last Fed meeting, held on June 20. At the time, a new president with a pro-growth agenda had just been installed in France, and Greece had finally managed to form a tenuous government. We were yet to find out what Germany's response might be, which did not become clear until the more recent EU summit.

At the FMOC meeting, the Fed extended Operation Twist ? the selling of short date bonds and the buying of long date bonds without expanding the balance sheet. In the accompanying statement on the day, there was no mention of QE3. Traders thus sold stocks with their ears pinned back. But in the press conference that