What Does GDP Mean For Interest Rates?
Stocks are lower on mixed economic news.
GDP came in worse than expected at 4.2%.
Initial claims fell a whopping 18,000 with economists expecting only a 10,000
drop. Fed Chairman Alan Greenspan is known to watch personal consumption expenditures (PCE), a key measure of inflation pressure. The index climbed to a 2% annual rate — almost doubling Q3 and Q4. This is some cause for concern among economists. The FOMC meets next Tuesday and is not expected to raise rates but may lay the groundwork future rate increases.
ExxonMobil
(
XOM |
Quote |
Chart |
News |
PowerRating) beat the
Street by $0.08 cents with earnings down 23% to $5.44 billion on revenue of
$67.6 billion. XOM raised its quarterly dividend to 27 cents a share, the
twenty-second consecutive year the company has raised its dividend. Raytheon
(
RTN |
Quote |
Chart |
News |
PowerRating) reported higher earnings of $128 million with increasing pension costs
taking a big bite out of income. Revenue for the quarter rose 11% to $4.7
billion. RTN upped its 2004 earnings outlook to $1.35. Georgia Pacific
(
GP |
Quote |
Chart |
News |
PowerRating)
posted higher earnings of $147 million with revenue at $5.22 billion on rising
lumber prices.
Â
| Dow | -18.57 |
10324.01 |
| S&P 500 |
-3.24 | 1118.71 |
| Nasdaq | -19.09 |
1970.48 |
The day’s leading sectors are
Amex Gold Bugs
(
HUI.X |
Quote |
Chart |
News |
PowerRating) +2.23%, Gold and Silver
(
XAU.X |
Quote |
Chart |
News |
PowerRating)
+2.21%, Insurance
(
IUX.X |
Quote |
Chart |
News |
PowerRating) +0.63%, and Healthcare Provider
(
RXH.X |
Quote |
Chart |
News |
PowerRating) +0.40%.
Weak today are Semis
(
SOX.X |
Quote |
Chart |
News |
PowerRating)
-2.87%, and Disk Drives
(
DDX.X |
Quote |
Chart |
News |
PowerRating) -2.53%
Economic news releases today
included GDP at 4.2%, Chain deflator higher at 2.5% and employment costs up
11.%. Weekly initial claims fell by 18,000 with the Help-Wanted index at 39.
10-year Notes are +35 at
110 250
The dollar
is -0.29 at 91.07
Gold is +1.40 at 396.50
Crude Oil is +0.44 at
36.90
Volume is 533,000,000 on
the NYSE, and 778,000,000 on the Nasdaq.
Market breadth is mixed.
| NYSE | Issues | |
| Advancing |
778 | Up Vol 247 |
| Declining | 2500 | Down Vol 1593 |
| Ratio | 3.21 | 6.25 |
| Nasdaq |
||
| Advancing |
654 | Up Vol 269 |
| Declining |
2536 | Down Vol 1734 |
| Ratio | 3.89 | 6.41 |
Top Dow stocks are:
Honeywell
(
HON |
Quote |
Chart |
News |
PowerRating),
+1.72% at 35.71, Procter & Gamble
(
PG |
Quote |
Chart |
News |
PowerRating) +1.38% at 105.62, Alcoa
(
AA |
Quote |
Chart |
News |
PowerRating), +1.16% at 31.33, and American International Group
(
AIG |
Quote |
Chart |
News |
PowerRating),
+1.13% at 72.96,
Stocks in the news:
Macromedia
(
MACR |
Quote |
Chart |
News |
PowerRating) doubled its net
income to $14.7 million on revenue of $102 million. Merrill Lynch upgraded the
stock on the news.
Gillette
(
G |
Quote |
Chart |
News |
PowerRating) posted earnings of $376 million on sales
of 2.24 billion with a 16% jump in razor and blade sales.
Time Warner
(
TWX |
Quote |
Chart |
News |
PowerRating) reported earnings of
$961 million before one-time charges. Revenue rose 9.2% to $10.1 billion. TWX
reduced its debt balance to $18.8 billion from $22.7.
LSI Logic
(
LSI |
Quote |
Chart |
News |
PowerRating) earned $8 million on
sales of $452 million and guided the Street lower for the next quarter with
revenue at $460 million and earnings of two cents.
Brice Wightman
bricew@tradingmarkets.com