DAVE HARRIS: Welcome to the Dave On Stocks Podcast. This is show #73. It's Wednesday September 5^th 2007. I'm Dave Harris. I'm a long term investor with perspective on the market and individual stock advice.

It was a down day on Wall Street as questions arise about whether or not the Fed will cut a key interest rate when they meet on September 18^th. The much anticipated Beige Book (a look at regional economic conditions from the Fed) indicated today that aside from housing, the overall economy suffered little damage from the turmoil in the financial markets. Any news from the Fed is closely watched these days. Most economists expect a rate cut. I think if we don't get a cut in the Fed Funds rate, equities will significantly decline. If we do get a cut as most on Wall Street expect, I'm forecasting little reaction from stocks. The other piece of economic data today, lower pending home sales, also added fuel to the fire. July pending existing home sales fell by over 16 percent. That's the worst in 6 years. The DOW finished 143.39 points lower at 13,305.47. The S&P 500 index fell 17.13 to 1,472.29. The NASDAQ lost 24.29 points to finish at 2,605.95. Bond prices rose with 10 year treasury rising 22/32 putting the yield at 4.46 percent.

Apple (APPL) said their 8 GB iPhone is selling at $399 now. That's $200 off the original price. Also, new versions of the iPods were announced today by CEO Steve Jobs. The new version will have a touch screen and allow you to browse the web. Also expect to see a new Nano device this weekend in stores. I think it's a little early to start cutting the iPhone price. I also feel bad for people who spent $599 for the iPhone. However, I think these developments will generate stronger sales from Apple. This company is truly cutting edge. I would buy the stock here. Apple fell over 5 percent today and closed at $136.76 per share.

We still have some big economic news this shortened trading week. Tomorrow is initial jobless claims and revised second quarter productivity data. Then Friday is the big jobs report from the Labor Department. I would expect some heavy volatility this week. But the key thing to watch this month is the Fed's decision September 18^th. If you're long term, the market fundamentals look good. Now is the time to stick with the large caps that pay dividends and are managed well. That's companies like Walgreens (WAG), Caterpillar (CAT), Target (TGT) and General Electric (GE) to name a few.

That's all for today's podcast of Dave On Stocks. I'm Dave Harris. Write me with any questions or comments at the "contact us" link on this page. My website is www.daveonstocks.com.