U.S. GDP Revised to 5.9%; Home Sales Fall 7.2%

123jump.com Staff
26 Feb, 2010
New York City

U.S. existing home sales in January declined 7.2%, second monthly decline in a row. The second estimate of the U.S. GDP showed an expansion of 5.9%. Stocks declined after weaker than expected home sales. The Gap Inc increased 5.5% after quarterly net surged 45%.

[R]10:30 AM New York – U.S. existing home sales in January declined 7.2%, second monthly decline in a row. The second estimate of the U.S. GDP showed an expansion of 5.9%. Stocks declined after weaker than expected home sales. The Gap Inc increased 5.5% after quarterly net surged 45%.[/R]

Stocks fell in the early trading after existing U.S. home sales decreased for the second month in a row and fourth quarter gross domestic product estimate was revised higher.

Existing home sales declined in January 7.2%, second monthly decline in a row according to the latest data from the National Association of Realtors. Sales declined to an annual pace of 5.5 million units after falling at a record pace of 16.2% in December.

Q4 GDP Revised to 5.9%

U.S. economy in the fourth quarter increased 5.9% from the first estimate of 5.7%. The economic expansion in the third quarter was 2.2%.

The estimate was revised in the quarter on the acceleration in private inventory investment, an upturn in non-residential fixed investment and a deceleration in imports. Higher production on automobiles added 0.44 percentage points to the fourth quarter change in the GDP.

Excluding food and energy prices, the prices paid by the consumers increased 1.3% in the fourth quarter according to the latest estimate compared to 0.3% in the third quarter.

The price index for all goods increased 1.9% in the fourth quarter.

The quarter saw an uptick in manufacturing after producers rebuilt inventories ahead of demand. The change in real private inventories added 3.88 percentage points to the fourth quarter change in real GDP after adding 0.69 percentage point to the third quarter.

Private businesses decreased inventories $16.9 billion in the quarter compared to $139.2 billion in the third quarter and $160.2 billion in the second quarter.

According to the second estimate, the real GDP decreased 2.4% in 2009 after increasing at 0.4% in 2008. The third estimate to be released in five weeks will be the final read on the fourth quarter and 2009.

Earnings Review

Cogent, Inc, a provider of automated fingerprint identification systems said fourth quarter sales fell 5% to $37.9 million from $40.0 million a year ago. Net income in the quarter fell 18% to $9.4 million or 10 cents per diluted share compared to net income of $11.5 million or 13 cents per share a year ago.

Fluor Corporation, the engineering and construction management firm said fourth quarter revenues fell 9.7% to $5.48 billion from $6.07 billion a year ago. Net income in the quarter fell 21.5% to $148.7 million or 82 cents per diluted share compared to net income of $189.5 million or $1.03 per share a year ago.

The Gap, Inc, the specialty retailer said fourth quarter sales rose 4% to $4.24 billion from $4.08 billion a year ago. Net income in the quarter rose 45% to $352 million or 51 cents per diluted share compared to net income of $243 million or 34 cents per share a year ago.

Comparable same-store sales increased 2%.