Dow Jones Dips Below 8000
The U.S. gross domestic product declined in the fourth quarter, an annualized projected at 6.3%. That was the end of February figure is 6.2% downward revision, analysts had, but even minus 6.5% expected. The reason for the worst recession in the United States for more than 26 years, falls in exports, consumption and investment. With consumer spending accounting for more than two-thirds of total economic performance. “There is obviously a trend. Finally, all the news is worse than expected, now they are not as bad as feared,” said Stephanie Giroux of TD AMERITRADE.
Investors were also relieved that a sale of U.S. government bonds smoothly went. The day before the low demand at an auction who are worried the U.S. government could be problems in financing the economy get packages.
Even from the rising number of unemployed could be the U.S. investors do not confuse the number of unemployment claims rose last week more than expected to a new record. In the past week were 5.56 million U.S. citizens unemployment assistance – 122,000 more than a week before.
Market participants hope that the bear market rally until the next reporting season continues. Then, the weak corporate results for a definitive end of the series make my experts.
In the meantime, announced the U.S. government tightened rules for financial companies. With the help of new rules of the game should be prevented that a poorly regulated financial system once again threatens the entire economy, said Finance Minister Timothy Geithner before the Financial Services Committee U.S. House of Representatives. The mistakes of the past year and a half have shown that one regulator for all financial market participants was necessary.
Among the winners were yet again a song from the financial industry: papers of the Bank of America rose by 2.2%, shares of JP Morgan gained 1.5%.
Among the biggest winners was the largest U.S. electronics chain Best Buy, whose papers by 11.6% above soared. Best Buy in the fourth quarter recorded a profit of $ 570 million, exceeding their earnings estimates of analysts, and stirred the hopes that consumer spending is not quite as strong as feared limit. In the wake swam with more retailers to the top. Wal-Mart shares were significantly increased by 2% of the biggest winners in the Dow. The soft drink manufacturer Dr Pepper Snapple Group exceeded its quarterly figures are also the market expectations. Its title is more expensive by 14 percent.
Hope for GM
The title of General Motors is more expensive by 12%. The group announced, 7500 by the union UAW represented workers have a severance pay offer accepted. This is equivalent to twelve percent of workers in U.S. manufacturing plants. Furthermore, since the car company hopes to further support the U.S. government to make. Specifically for the rescue of the industry working group was set up new state funds for the struggling car company in view. It was clear that more assistance was on its way, said Senator Carl Levin from Michigan State Auto. Even the Wall Street Journal reported, relying on members of the Working Group that the Committee make a recommendation for additional help preparing. In response, Ford also slips to 5.4%.