Wednesday Afternoon Cheat Sheet: 3 Stories that Moved Markets

The markets moved from early-morning losses, to modest gains, to a decided loss on Wednesday. Relatively strong earnings and a positive jobs report were not enough to counteract other unexpectedly negative economic indicators.

At the close: DJIA: -0.33%, S&P 500: -0.41%, NASDAQ: -0.36%.

Here are three stories that moved markets on Wednesday:Bear Crossing

1) With the deepest cuts to defense spending in 40 years, fewer exports, and low growth in business stockpiles, the United States economy unexpectedly shrank from October to December, according to the advance figures released by the Commerce Department’s Bureau of Economic Analysis.

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Real gross domestic product, the output of goods and services produced by labor and property located in the United States, contracted by 0.1 percent in the last quarter — the first drop in economic output in 3 1/2 years. This represented a significant slowdown from the 3.1 percent growth reported in the previous three months… (Read more.)

StudentDebt2) While the student debt bubble has yet to pop like housing, more cracks are appearing. New research shows that college loan debt is dramatically rising and becoming riskier than in past years.

FICO, a company that provides analytics including credit scores, recently conducted a study to examine changes in student loans since 2005. To little surprise, the results were quite sobering. The sky-rocketing costs of college have been outpacing inflation for years. As a result, more consumers are taking out student loans to pay for their education. FICO finds that approximately 12 million Americans had two or more open student loans on their credit report in 2005. In 2012, this figure more than doubled to 26 million Americans… (Read more.)

3) On Wednesday, U.S. Federal Reserve officials concluded their two-day monetary policy meeting. Speculation has been rising that the central bank may soon give the printing presses a break, but a weak economy and currency wars are still providing plenty of cover for bond purchases.

Last month, the Federal Reserve started to inject the idea that policymakers were divided about conducting bond purchases beyond this year. The Federal Open Market Committee December minutes stated: “Several others thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013, citing concerns about financial stability or the size of the balance sheet. One member viewed any additional purchases as unwarranted.” (Read more.)

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