Friday’s Mid-Day Movers: 3 Stories Driving Markets

Stocks edged down on Friday afternoon. Underwhelming earnings complimented underwhelming economic growth data, indicating that the markets would close the day in negative territory. At 12:15 p.m.:

DJIA: +0.00% to 14,701.10 S&P 500: -0.43% to 1,578.30 NASDAQ: -0.63% to 3,269.26
Gold: -$9.00 to $1,453.00 per ounce Oil: -$1.40 to $92.24 per barrel U.S. 10-Year: -0.045 points to 1.664%

Here are three stories shaping markets on Friday afternoon:

1) Is This GDP Growth Surprising? While economists had forecast that the American economy would speed up and grow at a rate of 3 percent, the growth reported by the Commerce Department Friday came in slightly below that figure. For the first three months of the year, gross domestic product expanded at an annual pace of 2.5 percent.

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However, faster growth of any kind is needed. The economy grew at an annual rate of just 0.4 percent in the fourth quarter of last year, and much of the acceleration in gross domestic product was likely a result of that unusually slow growth. At the end of last year, growth was hurt by reduced restocking of businesses’ inventories, but they made up for that lack in the fist quarter by adding much more product to their shelves… (Read more.)

2) Are Consumers Growing More Pessimistic About the Future? Consumers in the United States are still feeling down about the economy, but not as much as expected. Looking ahead, expectations about the future are taking a hit.

The index of consumer sentiment compiled by Thomson Reuters and the University of Michigan fell to 76.4 in April, compared to 78.6 in the previous month. It is the lowest reading since the beginning of the year, but higher than the preliminary April reading of only 72.3. Economists were expecting a reading of about 72.3. The median projection in a Bloomberg survey was 73.5… (Read more.)

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3) Has the Euro Zone Turned a Corner? “I think the worst of the debt crisis is behind us,” said European Central Bank Governing Council member George Provopoulos in an interview with Bloomberg. “This does not mean that all weaknesses have been dealt with or that the road ahead will be without bumps. But I think the worst is over.”

The last big, bad thing to happen to Europe was the clumsy bailout of Cyprus. Market participants around the world cringed as European finance ministers proposed charging small depositors for the bail-in / bailout of the nation’s banking system. Cypriot policymakers shot down the initial proposal, justified in their belief that imposing losses on insured (small) depositors was the wrong way to handle the situation… (Read more.)

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