9:16 AM Market preview: Stock futures and EU shares sink after U.S. GDP unexpectedly contracts in Q4, led by a plunge in defense spending. "This is one #$%$ in the armor of the recent better-than-expected economic indicators," says analyst Wayne Kaufman. "If it turns out Sandy and the fiscal cliff were the reasons for (the contraction), people will shrug it off." The S&P benchmark is -0.3%. Later: FOMC announcement
Defense spending falls 22% - the biggest drop in 40 years - leading real federal spending -15%. State/local spending -0.7%. Personal consumption expenditures +2.2% vs. 1.6% in Q3. Nonresidential fixed investment +8.4% vs. +1.8%. Stock futures dipped and then bounced on the soft print. as traders look at calendars and realize we're halfway to 2013 Q2.