U.S. Q4 GDP Revised to 5.6%; Euro Rebounds

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

U.S. GDP growth was revised downward to 5.6% rate from the second estimate of 5.9%. For 2009, the economy shrank at the fastest pace in sixty one years at 2.4%. The euro rebounds from the 10-month low. Oracle third quarter revenues rose 17.4% and net fell 10.5%. Acccenture quarterly net falls 3%.

[R]10:45 AM New York – U.S. GDP growth was revised downward to 5.6% rate from the second estimate of 5.9%. For 2009, the economy shrank at the fastest pace in sixty one years at 2.4%. The euro rebounds from the 10-month low.[/R]

World markets trade higher and euro stabilize after European leaders agree on Greek bailout terms that involve the IMF. U.S. Treasuries rebound after dropping to as low as 3.97% yield on 10-year bonds.

U.S. economy grew at 5.6% annual rate in the fourth quarter in the third estimate by the Commerce Department. First estimate on the GDP was 5.7% and second estimate was at 5.9% GDP increase in the fourth quarter.

In 2009, the economy shrank 2.4%, the largest decline since 1946. GDP increased 0.4% in 2008. Fourth quarter rebound was the fastest in six years as businesses rebuild inventories but consumers spending remained soft.

Current dollar GDP, the market value of the nation’s output of goods and services increased 6.1% to $14,453.8 billion.

Corporate profits in fourth quarter increased by $108.7 billion to $1.47 trillion from the previous quarter and surged 31% from the quarter a year ago. Investment in inventories contributed to 3.8 percentage points to GDP.

Consumer spending increased at 1.6% rate in the fourth quarter after rising at 2.8% in the third quarter.

Business spending surged at 19% rate in the quarter, the largest increase since 1988 and construction spending including offices and factories declined at 18% rate.

Commodities, Currencies and Yields

Crude oil futures of immediate month delivery increased 61 cents to $81.14 a barrel and natural gas futures declined 1 cent to $3.98 per mBtu.

In the early trading in New York, gold increased $3.60 to $1,097 an ounce and copper futures increased 4.65 to $3.4270 per pound.

The euro gained against the dollar and the pound after European leaders appear to agree on the bailout terms for Greece with the help of the IMF.

One euro fetched $1.337 and one dollar traded at 92.70 yen. The pound traded in New York at $1.485.

Yields on 10-year bonds increased to 3.88% and on 30-year U.S. Treasury bonds traded at 4.76% after 7-year note auction of $32 billion drew disappointing interest. U.S. Treasury is increasingly forced to offer short term maturities as investors shy away from longer dated maturities.

Earnings Review

Accenture plc ((ACN)), the technology outsourcing and consulting company said second quarter revenues fell 2% to $5.54 billion from $5.66 billion a year ago. Net income in the quarter fell 3% to $399.8 million or 60 cents per diluted share compared to net income of $411.4 million or 63 cents per share a year ago.

Oracle Corporation ((ORCL)), the software company said third quarter revenues rose 17.4% to $6.40 billion from $5.45 billion a year ago. Net income in the quarter fell 10.5% to $1.19 billion or 23 cents per diluted share compared to net income of $1.33 billion or 26 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed higher 167.52 or 1.55% to 10,996.37, and Hang Seng index in Hong Kong increased 274.56 or 1.32% to 21,053.11, and CSI 300 index in China higher 45.87 or 1.42% to 3,275.00. ASX 200 index in Australia increased 11.50 or 0.24% to 4,896.90. The FTSE Bursa KL Composite index in Malaysia was higher 2.66 or 0.20% to 1,315.14.

The Kospi Index in South Korea increased 9.33 or 0.55% to close at 1,697.72. SET index in Thailand closed lower 5.52 or 0.70% to 778.86. JSE Index in Indonesia increased 13.93 or 0.50% to 2,813.08. The Sensex index in India increased 85.91 or 0.49% to 17,644.76.

Europe Markets Review

In London FTSE 100 Index traded lower 21.54 or 0.38% to 5,706.11, in Paris CAC 40 Index decreased 11.34 or 0.28% to 3,989.14 and in Frankfurt DAX index traded lower 16.92 or 0.28% to 6,116.03. In Zurich trading SMI decreased 40.61 or 0.59% to 6,853.56.