Today's weaker than expected job report supposedly contributed to its 250 point drubbing. But the simple reality is that nobody knows why the market went down.

If the market had gone up today, so-called analysts would have been available to explain that the market rose because weak job market results meant that the Fed was more likely to lower interest rates than it otherwise might have been.

After all, some analyst could have argued, the risks of not cutting interest rates -- in the form of a weaker economy -- far outweigh the inflationary risks. In fact, those analysts might argue, a decelerating job market means that there is a bigger risk of deflation. And what better way to counter that risk than to cut rates?

So why didn't the market rally today? Nobody who knows the answer is talking to the media. It's safe to say that the wisdom of those who comment to the press on market movements is worth exactly what you paid for it -- nothing.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

The minutes of the Federal Reserve Open Market Committee (FOMC) were released this afternoon and judging by the 130 point plunge that followed, some investors were disappointed with the Fed.

AP reported that investors were hoping for stronger signs that the Fed would cut its Fed Funds rate when it next meets on September 18th. Although the Fed fretted about the slowing housing market and tightening credit markets, which would lead one to believe that the Fed might be willing to cut rates, investors were expecting a more definite statement. However, the Fed continued to identify inflation as the biggest risk for the economy -- implying that it would hold rates steady to keep inflation from getting further out of control.

While it would be nice to think that something so simple drives stock prices up and down, it's really much simpler and much more difficult to explain their movement. The reasons that big investors buy and sell stocks are simply not disclosed to investors. So the media just takes a quote from a market expert without really knowing what caused prices to move.

Meanwhile, the average Dow stock lost 2.1% of its value today. And the reason might be that the Fed is not eager to bail out those who borrowed too much money and now can't pay it back.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

This past Tuesday I wrote an article on dividend-paying stocks offer investors more protection in tough times. It has only been three trading days since the Tuesday hit and looking back now, the stocks discussed with high, sustainable dividends are holding up just fine.

Whether it's AT&T, Inc. (NYSE:T), Bank of America Corporation (NYSE:BAC), CitiGroup, Inc. (NYSE:C) or Wells Fargo & Company (NYSE:WFC), the stock movements have been negligible. These stocks have been attracting investors seeking safety of principal and a high yield. But remember, most excellent dividend paying companies have a history of raising those dividend payments, and with that fact comes a higher stock price as well.

If the Federal Reserve begins to lower interest rates in the spring and summer, and I believe they will, the yields on these stocks becomes even more valuable. As riskless treasuries are in the 4%+ neighborhood now, if the Fed lowers rates and those yields fall into the 3% neighborhood, the stocks of underlying high-dividend payers will go up.Current yields tend to go together especially if underlying quality is present. For example, for Bank of America to yield 3%, the stock would have to go up to the mid $60's. If you own the stock here at $50-51, you have locked in a 4.40% yield, and if we see declining interest rates, for the stock to remain competitive with US Treasuries, the share price would soar. Not to mention, BAC will probably raise their dividend in 2007, 2008, and beyond.

This is where high dividend paying stocks can be powerful investments...

Georges Yared is the author of recently released books Stop Losing Money Today and Baby Boomer Investing...Where do we go from here?

U.S. Treasuries and the dollar traded flat, waiting for word on rates from the Federal Reserve's October two-day meeting, which ends tomorrow. Most Fed Watchers expect the Fed to hold the line on rates at least for now, but expect rate hikes in 2007. Right now economic activity is a mixed bag. The weakest part of the economy is the real estate market, but other areas of weakness were seen as well in the past week.

Factory activity in some parts of the country is weak. The Conference Board reported its index of leading indicators edged up slower than expected by just 0.1%. Economists were expecting to see a 0.3% advance. Consumer expectations and money supply were up, while building permits and average weekly manufacturing hours were weak. The biggest surprise to many was a report from Bloomberg on Oct. 23 indicating that the Fed's September Green Book (Fed staff projections) implied that unless the economy slows more than the Fed now expects, the central bank may have to start raising rates.

Federal Reserve Chairman Ben Bernanke certainly echoed that sentiment about three weeks ago when he said, "We have to watch carefully to make sure that [inflation] doesn't rise or even remain where it is," according to today's Wall Street Journal. Bernanke makes it clear that he not only wants to see the core inflation rate, which does exclude food and energy, hold steady -- he wants to see it go down.

Remember Ben Bernanke champions "inflation targeting," which essentially means you set an inflation rate and make sure the economy stays at that rate. It can be a very inflexible marker. In fact, he wrote one of the key books on it, "Inflation Targeting: Lessons from the International Experience" (Princeton University Press, 2001) and one of his co-authors for that book now sits on the Federal Reserve Board with him, Frederic Mishkin. Many believe the consensus for inflation targeting is growing among other Federal Reserve Board members as well.

While Alan Greenspan was an inflation hawk, he believed in being more flexible when setting rates. Whether Bernanke can see the value to flexibility will only be known by reading the minutes to the Federal Reserve board meetings, especially the ones for October, which won't be out until November. But, do expect rate hikes by 2007 unless we see a more dramatic slowing of the economy.