Tuesday Afternoon Cheat Sheet: 3 Stories That Moved Markets

The U.S. equity markets advanced on Tuesday. Investors seem to brush aside poor manufacturing data out of Europe and took strong U.S. factory orders data as a good omen. The Dow and S&P set fresh records.

At the close: DJIA: +0.61%, S&P 500: +0.42%, NASDAQ: +0.48%.

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Here are three stories that helped move markets on Tuesday:

1) The latest data from the U.S. Bureau of Economic Analysis confirm that the nation’s economy barely grew in the fourth quarter of 2012. However, despite the weak economy, corporate profits as a share of GDP hit their second highest level ever. Based on the data, the BEA revised fourth-quarter real GDP growth upward from an annual rate of 0.1 percent to 0.4 percent, still the second-slowest quarterly growth since the recovery began in 2009.

Consumer spending was weaker than previously reported, with durable goods accounting for most of the growth that did take place. Fixed investment was a relative bright spot, led by business equipment and computers… (Read more.)

2) While orders for new factory goods rose in February, the gauge of planned business spending dropped, providing an indication that factory activity is rebounding at only a moderate pace.

Markets have been flush with generally positive economic news in recent weeks. Despite two consecutive reports of initial jobless claims increasing at the end of March, the housing and labor markets are showing evidence of recovery — a trend which stands in contrast to fears that were circulated in the wake of the fiscal cliff and sequester crises. Factory orders have fluctuated in the past several months, but February’s data fits with the current trend… (Read more.)

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3) Unemployment in the 27-member European Union increased from 10.8 percent in January to 10.9 percent in February, according to Eurostat, the statistical office of the European Union. In the 17-member euro area, the seasonally-adjusted unemployment rate was 12.0 percent, a dramatic increase from 10.9 percent in the year-ago period.

Compounding Europe’s struggling labor market is the Markit Eurozone Manufacturing PMI report for March, which was also released on Tuesday morning. The report’s index of overall business conditions decreased from 47.9 in February to 46.8 in March, a three-month low… (Read more.)

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