U.S. GDP Growths Lowered, Stocks Follow

123jump.com Staff
31 Jul, 2008
New York City

Investors sold stocks after the second quarter economic growth was reported at 1.9% annual rate by the Commerce Department. The department revised economic growth lower for several quarters dating back to 2005 and economy in the fourth quarter 2007 shrank at 0.2% rate lower than earlier projection of 0.6% growth. Exxon Mobil reported a decline in production of 7.5% and technology shares fell after Akamai Technologies lowered its earnings guidance.

4:30PM New York, 10:30PM Frankfurt, 6:30AM Sydney[R]– Economic worries were on the top of investors mind after lower than GDP growth rates were reported for the U.S. economy.[/R]

Global Markets Update

U.S. stocks traded lower after the release of weak U.S. economic growth estimate and lowered estimates of the previous years. The economy grew at 1.9% annual rate in the second quarter and growth rate for the first quarter was lowered to 0.9% from 1%. The economy shrank at 0.2% in the fourth quarter of 2007 compared to earlier estimate of a rise of 0.6%. In the earnings news, MasterCard reported a loss on settlement with American Express and Visa reported earnings rise of 41%.


North American Markets indexes

Dow Jones Industrial Average decreased 205.67 or 1.78% to a close of 11,378.02, S&P 500 closed down 16.88 or 1.31% to 1,267.38, and Nasdaq Composite Index decreased 4.17 or 0.18% to close at 2,325.55. In Toronto TSX Composite closed down 90.30 or 0.66% to 13,592.91.

Of the 30 stocks in Dow Jones Industrial Average 4 stocks gained, 26 declined and none was unchanged.

Johnson & Johnson led the gainers in the Dow Jones Index with a rise of 0.5% followed by increases in Home Depot Inc of 0.38%, in Coca-Cola Company of 0.37% and in Wal-Mart Stores of 0.10%.

Exxon Mobil led decliners in the Dow Jones Industrial Average with a loss of 4.7% followed by losses in Boeing of 4.3%, in Walt Disney Company of 4.2%, in Caterpillar of 3.5% and in United Technologies Corp of 3.4%.

Of the stocks in S&P 500 index, 154 increased, 346 declined and none was unchanged. Of the index stocks 24 stocks rose more than 3% and 84 fell more than 3%.

Akamai Technologies led the decliners in the S&P 500 index with a loss of 25.3% followed by losses in Consol Energy of 15.9%, in Total System Services of 11.5%, in MasterCard Inc of 9.8%, in Parker Hannifin of 9.4%, in General Growth Properties of 8.9% and in National City Corp of 8.33%.

International Paper led the gainers in the S&P 500 index with a rise of 14% followed by gains in Motorola Inc of 12.5%, in WaMu Inc of 12.5%, in Marathon Oil of 9.6%, in Centex Corp of 8.6% and in Unum Group of 7.66%.

South American Markets Indexes

Peru led gainers in the Latin American markets with a rise of 2.8% followed by increases in Colombia of 1.40%, in Venezuela of 0.33% and in Mexico of 0.1%.

Argentina led decliners in the region with a loss of 1.54% followed by losses in Brazil of 0.8%.

Europe Markets Review

In London FTSE 100 Index closed lower 8.80 or 0.16% to 5,411.90, in Paris CAC 40 Index decreased 8.19 or 0.19% to close at 4,392.36 and in Frankfurt DAX index higher 19.44 or 0.30% to close at 6,479.56. In Zurich trading SMI increased 32.30 or 0.45% to close at 7,141.21.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 9.02 or 0.07% to 13,376.81, Hang Seng index in Hong Kong increased 40.50 or 0.18% closed to 22,731.10. ASX 200 index in Australia increased 40.70 or 0.82% to close 4,977.40. The KL Composite index in Malaysia increased 3.15 or 0.27% closed to 1,163.09.

The Kospi Index in South Korea increased 16.97 or 1.08% to close at 1,594.67, SET index in Thailand closed higher 6.42 or 0.96% to 676.32 and JSE Index in Indonesia increased 25.82 or 1.13% to 2,304.51. The Sensex index in India increased 68.54 or 0.48% to 14,355.75.

Commodities, Metals, and Currencies

Crude oil decreased 4 cents to close at $124.04 a barrel for a front month contract, natural gas closed up 3 cents to $9.14 per mBtu and gasoline futures decreased 0.10 cents to close at 306.99 cents per gallon.

Gold increased 30 cents in New York trading to close at $923.00 per ounce, silver closed up 1.5 cents to $17.805 per ounce and copper for front month delivery decreased 0.55 cent to $3.6560 per pound.

Wheat futures were unchanged in Chicago trading and closed at $7.837 per bushel. Sugar increased 0.53 cent to 13.93 cents per pound. Soybean future closed down 4.25 cents to $13.99 a bushel.

Dollar edged lower and traded near record low against euro to $1.5583 and edged higher against yen to 107.76.

Yields on U.S. bonds decreased to 3.95% with 10 years of maturities and decreased to 4.57% with 30-year of maturities.