STOCKS FALL: Here's What You Need To Know
Markets ended the week with very low volatility despite a disappointing GDP report.
First the scoreboard:
Dow: 14,712, +11.7 pts, +0.0%
S&P 500: 1,582, -2.9 pts, -0.1%
NASDAQ: 3,279, -10.7 pts, -0.3%
And now the top stories:
The Bureau of Economic Analysis published its first estimate of Q1 real GDP, and the report was mixed. GDP grew at a 2.5% rate, which was well below the 3.0% growth rate expected by economists. However, the personal consumption component was strong, growing at a 3.2% rate versus economists' estimate for a 2.8% rate.
"The unexpectedly large drag from defense spending was likely due in part to the first effects of sequestration, but could also be explained by constraints imposed by operating under a continuing resolution, which funded the government through March 27," said Goldman Sachs ' Jan Hatzius. Real defense spending contracted at an 11.5% rate in Q1, following a 22.0% rate of contraction in Q4. This is the "weakest two quarter run for defense spending since the end of the Korean War," noted JP Morgan's Michael Feroli.
"Year-over-year nominal GDP growth at or below 3.7% has occurred only in recessionary context," noted the unusually bearish economist Lakshman Achuthan. "Q1 2013 read is 3.4%, the second straight quarter below 3.7%." Here Are 12 Popular Myths About The US Economy >
The University of Michigan's closely followed estimate of April consumer confidence was revised up to 76.4 from a preliminary reading of 72.3. This was much better than the 73.5 level economists were looking for. Still, this was down from the March reading of 78.6.
Among the big movers in the stock market was JC Penney. Yesterday after the closing bell, George Soros disclosed that his fund had accumulated a 7.9% stake in the company. And during the trading session today, CNBC reported that it had secured new debt financing from Goldman Sachs. Each piece of news gave the stock a nice boost.
Don't Miss: Sobering Presentation Reveals The Two Economies In America >
 | ||
|  | |
| ||
BI Intelligence, a new subscription research service from Business Insider, provides in-depth insight, data, and analysis of the mobile industry. Access all reports, research updates, presentations, data and chart libraries plus much more with your free trial. | ||
| ||
| ||
More From Business Insider
