Market Recap: Stocks Slip on GDP Report
Markets closed mixed on Wall Street today: Dow -0.58%, S&P -0.16%, Nasdaq +0.4%, Oil -0.13%, Gold +0.64%.
On the commodities front, Oil (NYSE:USO) fell slightly to $99.57 a barrel. Precious metals rose with Gold (NYSE:GLD) climbing to $1,737 an ounce while Silver (NYSE:SLV) climbed 0.4% to settle at $33.9.
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Today’s markets were mixed because:
1) GDP. The Commerce Department’s monthly report on the U.S. gross domestic product showed the economy to have grown in the three months ended in December at its fastest pace since the second quarter of 2010, but a strong rebuilding of stocks by businesses and weak spending on capital goods signaled an impending slowdown in early 2012. While the U.S. economy grew at a 2.8 percent annual rate, it was slower than the 3.0 percent rate analysts had expected, and excluding inventories, the economy grew just 0.8 percent in the fourth quarter, a sharp step down from the previous quarter’s 3.2 percent pace.
2) Greece. As the Greek government continues talks with private creditors on restructuring its debt, its bailout lenders — the European Union, International Monetary Fund, and European Central Bank — are asking Greece to push through more budget cuts and implement a series of long-agreed austerity measures before they will release a 130-billion euro bailout package the struggling country desperately needs if it is to avoid a disorderly default when a 14 billion-euro debt payments comes due on March 20. Without an agreement with private creditors, Greece also jeopardizes its access to bailout funds, without which it would be next to impossible for the country to avoid default.
3) Earnings. Chevron (NYSE:CVX) was the worst-performing stock on the Dow today after the company posted its biggest drop in quarterly earnings in two years, widely missing Wall Street’s estimates. Procter & Gamble (NYSE:PG) was also a big decliner on the blue chip index after the company lowered its outlook for the year. DeVry (NYSE:DV) led the S&P 500’s slide after announcing that earnings plunged 90 percent in the last quarter as the for profit educator’s undergraduate enrollment continued to decline. Starbucks (NASDAQ:SBUX) weighed on the Nasdaq after issuing an underwhelming profit outlook, while Ford (NYSE:F) shares declined after earnings missed forecasts.