GDP Declines 6.1%; Bank of America Rises

123jump.com Staff
29 Apr, 2009
New York City

U.S. stocks edge higher after the release of first quarter GDP. Bank of America gained 7% ahead of annual general meeting and the fate of its chairman and CEO Ken Lewis is uncertain. E*Trade plunges after reporting a large loss. Arcelor Mittal reports a loss that may require covenant renegotiation.

[R]10:30AM New York – U.S. stocks edge higher after the release of first quarter GDP. Bank of America gained 7% ahead of annual general meeting and the fate of its chairman and CEO Ken Lewis is uncertain. E*Trade plunges after reporting a large loss.[/R]

The preliminary read on the U.S. GDP indicated a decline in the first quarter at annual rate of 6.1% from the fourth quarter of 2008 when it declined at a rate of 6.3%. The decline is the third quarterly decline in a row.

The Bureau of Economic Analysis indicated that the decrease in the first quarter primarily reflected the weakness in exports, inventory investments and construction industry that were off-set by positive contribution from the personal consumption expenditures.

The GDP declined at a rate of 2.6% from the previous year quarter, when it declined at a rate of 0.8%.

The construction spending declined at 38% but consumer spending increased at 2.2% in the quarter. Government spending declined at 3.9% in the quarter and smaller deficit also contributed positively to the GDP calculation.

Index Gainers & Losers

In the morning trading broader averages edged higher with the S&P 500 index increasing 1.4% or 11.95 to 867.11. Of the stocks in the index, 425 increases, 71 declined and 4 were unchanged.

Wyndham Worldwide led the gainers in the S&P 500 index with a rise of 17% followed by increase in Life Technologies of 14.2%, in Meredith Corp of 13.1%, in Massey Energy Company of 12.1%, in Cabot Oil & Gas of 8.2% and in KeyCorp of 8%.

E*Trade Financial led decliners in the S&P 500 index with a loss of 26.8% followed by decline in VF Corp of 12.3%, in Total System Services of 10%, in Aetna Inc of 6.5%, in Bristol Myers Squibb of 3.5% and in Medco Health Solution of 3.3%.

U.S. Earnings Review

Pfizer Inc, the world''s largest drug maker said first quarter revenues fell 8% to $10.9 billion from $11.8 billion a year ago. Net income in the quarter fell 2% to $2.73 billion or 40 cents per diluted share compared to net income of $2.78 billion or 41 cents per share a year ago.

Pfizer Inc ((PFE)) in the last one year traded as high as $20.65 in May 2008 and as low as $11.62 in March 2009. Based on the yesterday’s closing price of $13.64 the company has market cap of $90.31 billion.

V.F. Corporation, the apparel maker said first quarter revenues fell 7% to $1.73 billion from $1.85 billion a year ago. Net income in the quarter fell 33% to $100.4 million or 91 cents per diluted share compared to net income of $148.9 million or $1.33 per share a year ago.

V.F. Corporation ((VFC)) in the last one year traded as high as $84.60 in September 2008 and as low as $38.22 in November 2008. Based on the yesterday’s closing price of $67.28 the company has market cap of $7.43 billion.

European Earnings Review

Sanofi-Aventis, France’s largest drug maker said first quarter revenues rose 3% to €7.1 billion from €6.9 billion. Net income in the quarter rose 16% to €2.18 billion or €1.67 per diluted share compared to net profit of €1.88 billion or €1.43 per share a year ago.

Sanofi-Aventis, in the last one year traded as high as €51.25 in May 2008 and as low as €36.06 in October 2008. Based on the yesterday’s closing price of €42.83 the company has market cap of €56.25 billion.

ArcelorMittal, the world’s biggest steelmaker said first quarter revenues fell 49% to $15.1 billion from $29.8 billion. Net loss in the quarter was $1.06 billion or 78 cents per diluted share compared to net profit of $2.37 billion or $1.68 per share a year ago.

ArcelorMittal, ((MT)) in the last one year traded as high as €19.00 in June 2008 and as low as €18.16 in March 2009. Based on the yesterday’s closing price of €18.67 the company has market cap of €25.51 billion.

Asian Markets Review

The Hang Seng index in Hong Kong increased 401.84 or 2.76% closed to 14,956.95, CSI 300 index in China higher 86.84 or 3.45%closed to 2,605.37. ASX 200 index in Australia decreased 13.10 or 0.35% closed to 3,695.30. The KL Composite index in Malaysia higher 1.76 or 0.18% closed to 967.46.The Markets of Tokyo were closed today.

The Kospi Index in South Korea increased 38.18 or 2.94% to close at 1,338.42. SET index in Thailand closed higher 10.78 or 2.28% to 483.50 and JSE Index in Indonesia increased 48.27 or 3.02% closed to 1,644.18. The Sensex index in India increased 401.50 or 3.65% closed to 11,403.25.

Europe Markets Review

In London FTSE 100 Index traded higher 48.06 or 1.17% to 4,144.46, in Paris CAC 40 Index increased 40.96 or 1.34% to 3,091.98 and in Frankfurt DAX index traded higher 43.88 or 0.95% to 4,651.30. In Zurich trading SMI decreased 9.91 or 0.19% to 5,099.18.