Stocks are expected to open modestly higher on Wall Street after a losing week last week. On Friday, stocks fell for the third straight day after reports on new-home sales and durable goods proved weaker than expected, leading investors to believe the economy has not yet emerged from the recession.

Stocks to watch today include pharmaceutical giant Johnson & Johnson (NYSE: JNJ), which agreed Monday to buy an 18% stake in European drug maker Crucell (NASDAQ: CRXL) for 301.8 million euros ($440 million), as part of a deal to develop flu vaccines.

Greed is alive and well on Wall Street and traders sent that message loud and clear back to the Federal Reserve Board and Chairman Bernanke today, by sending the Dow Jones Industrial Average down 362 points, or 2.6%. In a straightforward Dow dropping, but not jaw dropping retort of "What have you done for us lately"? Apparently cutting rates by a half point last month and another quarter point yesterday to 4.5% was not enough.

The suggestion by Bernanke that the Fed might be done cutting and have an inflation- and dollar-protecting bias in the future was not well-received. Add to that Exxon Mobile (NYSE: XOM)'s untimely and unwelcome poorer than expected earnings report and you have the makings for some fear being stirred into the investment cauldron just one day after Halloween.

Seems like more than one immature and impatient trader doing his best impression of Charlie Brown last night felt they got a rock in his treat bag -- and when the traders got back to their desks this morning they were still reflecting on that rock when the markets started to fall like one. The only thing that seemed to bring the slide to an end was perhaps when the closing bell rang, forcing everyone to take their sad faces home.

As the GDP numbers were released this morning, some people are saying that the market is heading for a downturn and a recession. However, let's take a look at the facts. The GDP is still growing, but at a reduced rate because of the slump in the housing sector. The unemployment rate is still steady at low levels.

As long as people can continue to make payments, they will not abandon their homes. However, speculators are in for a rough time. There is no guarantee that this will impact the average consumer as long as other parts of the economy continue to grow as recent indications show.

In my post on the recent Fed rate decision Chairman Ben Walks the Greenspan Line, I said that Dr. Bernanke prefers to leave rates alone if possible. However, he is also keenly aware of the housing situation and will not let it get out of control. Since the inflation readings continued to ease in the current GDP report, he has plenty of latitude to do this without losing credibility with the inflation hawks.

Even if the economic slowdown accelerates, this is not necessarily bad for the markets. The Fed has a variety of means to ensure a soft landing. Our Follow the Fed investment philosophy emphasizes that if the Fed eases aggressively, small stocks can do quite well even if large stocks as represented by the S&P 500 languish. This was the case from 2000-2005 as the data shows.

You also have to remember that we are entering the election cycle that I described in What the Bookies are Saying About the Upcoming Bear Market. Fed chairmen do not like bear markets to occur in the two years prior to a Presidential election.

Remember always to separate the news from the noise.

Doug Roberts is the Founder and Chief Investment Strategist for FollowtheFed.com, an independent research firm focusing on investment strategies using the Federal Reserve's impact on the stock prices. He previously held executive positions at Morgan Stanley Group and Sanford C. Bernstein & Co.