Morning Market Roundup: Econ Slowdown, Feds Say Recession Not so Bad, Facebook Down
- Posted on July 27, 2012 at 10:15am by
Becket Adams
- Print »
- Email »
Here’s what’s important in the business world this morning:
Economic Slowdown: The U.S. economy grew at an annual rate of just 1.5 percent from April through June, as Americans cut back sharply on spending.
Growth at or below 2 percent isn’t enough to lower the unemployment rate, which was 8.2 percent last month. And most economists don’t expect growth to pick up much in the second half of the year. Europe’s financial crisis and a looming budget crisis in the U.S. are expected to slow business investment further.
The 1.5 percent growth rate in the second quarter was the weakest since the economy, as measured by the gross domestic product, expanded at a 1.3 percent rate in the July-September quarter last year.
The Commerce Department also revised its growth estimates for the past three years. Those revisions showed that the economy contracted 3.1 percent in 2009, slightly less than the 3.5 percent previously reported. Growth in 2010 was put at 2.4 percent, down from 3 percent, with growth in 2011 at 1.8 percent instead of 1.7 percent.
The U.S. economy has never been so sluggish this long into a recovery.
Facebook: Facebook’s stock hit a new low Friday after it reported second-quarter results that disappointed investors.
The stock fell $3.58, or 13 percent, to $23.26 as trading opened Friday. Facebook Inc.’s initial public offering of stock priced at $38, and its low had been $25.52, hit on June 6.
Although revenue grew 32 percent in the second quarter, growth has slowed from earlier this year and from previous years. That’s a concern for a newly public company. Investors are willing to value new companies highly, even if they are not making a profit, because they expect booming revenue.
Recession: Fed officials are now saying The Great recession wasn’t quite as horrendous as previously thought. But it was still pretty horrendous: Updated government estimates from January 2009 through December 2011 show that the downturn remains by far the worst recession since the Great Depression.
And growth since the recession officially ended in June 2009 has been slightly less than previous estimates. That’s a reminder of how weak the recovery has been. The revisions were released Friday by the Commerce Department’s Bureau of Economic Analysis with its report on April-June growth. Each year in July, the bureau revises the previous three years of data on the nation’s gross domestic product, the broadest measure of the economy.
The changes show the economy shrank 4.7 percent from the start of the recession in December 2007 until it ended three years ago. That’s 0.4 percentage point less than the previous estimate of 5.1 percent.
The main reason for the revision: State and local governments spent more in 2009 than initially thought.
U.S. Futures: Stocks are opening higher on Wall Street as investors hope for action from the European Central Bank to keep the euro together.
The Dow Jones industrial average is up 55 points to 12,943 shortly after the opening bell Friday. Merck was the biggest gainer in the Dow after reporting earnings that were stronger than analysts were expecting.
Markets were rising for a second day following a pledge from the European Central Bank president to do whatever it takes to preserve the region’s monetary union.
Investors shrugged off the latest troubling sign about the U.S. economy, that growth slowed in the second quarter.
The Standard & Poor’s 500 is up seven to 1,367. The Nasdaq composite index is up 15 to 2,908.
The Associated Press contributed to this report.
Comments (17)
Sign In To Post Comments! Sign In
Popular Stories
Does Misstated Marathon Claim Prove Paul Ryan Is Dishonest? (POLL) 707 Comments
Paper Details Obama Admin’s Alleged Secret Note Sent to Iran: If Israel Attacks, We Won’t Get Involved 558 Comments
‘Made Up Religion’: TV Historian Enrages Muslims, Receives Threats After Producing UK Documentary Questioning Islam’s Beginnings 374 Comments
This Is the Creationists‘ Response to Scientist Bill Nye’s Viral Pro-Evolution Video Claiming They Harm Children 366 Comments
Roseanne Barr: Most Billionaires ‘Violent Pedophiles’ & ‘Heartless’ Cocaine Addicts 363 Comments
Faith
- This Is the Creationists‘ Response to Scientist Bill Nye’s Viral Pro-Evolution Video Claiming They Harm Children 366 Comments
Pakistani Muslim Cleric Accused of Framing Disabled Christian Girl in Koran-Burning Case Read More- ‘Made Up Religion’: TV Historian Enrages Muslims, Receives Threats After Producing UK Documentary Questioning Islam’s Beginnings 374 Comments
Meet the Controversial German Imam Accused of Brutally Beating His Wife & Pushing Sharia Law Read More
‘Self-Proclaimed Messiah’ & Unification Church Leader the Rev. Sun Myung Moon Has Died — Here’s His Life Story Read More
Business
- President Obama Issues Major ‘Green Energy’ Executive Order 291 Comments
- Germany’s Upcoming Court Ruling Will be Huge for the EU Read More
Ford Looks to Beat Toyota for Best-Selling Car in 2012 With This Model 149 Comments
Bernanke & QE3: Here’s What You Need to Know Read More- ‘Extortion’: Why Did the Labor Department ‘Drop the Hammer’ on Oregon Farmers? 302 Comments
Technology
- This Is the Creationists‘ Response to Scientist Bill Nye’s Viral Pro-Evolution Video Claiming They Harm Children 366 Comments
‘TaserDrone’: Hackers Weaponize Quadcopter With Actual ‘Shocking’ Technology Read More
Ever Heard of the Wild ‘Burning Man’ Festival in the Middle of the Nev. Desert? Here’s Your Primer Read More
Stanford Develops Technology ‘Better Than Steroids’ for Athlete Recovery Read More
Have You Pretended to Know What ‘the Cloud’ Is? You’re Not Alone Read More
Submitting your tip... please wait!
trotula
Posted on July 27, 2012 at 12:18pmTXDAVE22…OK. So the stock market is up. ALL THE OTHER ECONOMIC INDICATORS SUCK…but the stock market it up. Break out the champagne. Did it ever occur to you that the DOLLAR IS DEVALUED????? They’re printing money!
Report Post »txdave22
Posted on July 27, 2012 at 12:05pmAngelina Spencer, the executive director of the Association of Club Executives, which serves as a trade association for strip clubs, said an informal survey of convention business in New York and Denver had determined that Republicans dropped more money at clubs, by far.
“Hands down, it was Republicans,” she said. “The average was $150 for Republicans and $50 for Democrats.”
As further evidence of the clubs’ nonpartisan appeal, Don Kleinhans, the owner of the 2001 Odyssey, said when the Promise Keepers, a male evangelical group, came to town years ago, business was rollicking.
“We had phenomenal numbers all weekend, and they walked in wearing badges and name tags and weren’t shy at all,” he said.
James Davis, a spokesman for the Republican National Convention, declined to discuss Tampa’s prominent strip clubs.
Report Post »trotula
Posted on July 27, 2012 at 12:22pmThank you for that exceedingly helpful and relevant information.
Report Post »AvengerK
Posted on July 27, 2012 at 11:47amIn all seriouness…you have a part time senator from Illinois who’s never earned a paycheck from the private sector..who’s been marinated in marxist and radical thought all his life….who believes in big government and handouts…who has no understanding of how an economy works…who spends more time fundraising and vacationing than he does working…who appoints czars like Van Jones to oversee “green jobs”…who appoints utter incompetents like Tim Geithner, Christine -if you pass the stimulus unemployment won’t go over 8%- Romer…who hasn’t met with his much trumpeted jobs council in months..who’s budgets have been unanimously voted down in both houses of congress the list goes on ad nauseum…and these idiots who call themselves economic analyists are surprised that we’ve had the slowest recovery from a recession ever? No really?
Report Post »AvengerK
Posted on July 27, 2012 at 11:39amHey but Barry told us the private sector’s doing just fine….
Report Post »kaydeebeau
Posted on July 27, 2012 at 2:03pmHowever, don’t forget what Os plan is – the plan is to cripple the US economy, the Church, the worker, the military. The scariest part about O is that most people view him through the eyes of a typical American view. He does not share that view. His plan is destruction.
When the stated goal is to fundamentally transform…we have to understand what the fundamentals are and for them to be transformed that means they must be changed.
Report Post »BocaBobby
Posted on July 27, 2012 at 11:14amObama responded to the bad economic news with his latest initiative: Mortgages for Morons. SHOCKING: http://www.spnheadlines.com/2010/02/obama-signs-for-morons-bill_114.html
Report Post »txdave22
Posted on July 27, 2012 at 11:46amGOOGLE IF YOU DON’T BELIEVE: DJIA was abt 8000 when gw bush left office, now almost 13000,
so good times for over 100 million Americans that have stocks, funds, 401k, annuities, pensions, all done
during the AGE OF OBAMA!!!
When gw bush came to office DJIA abt 11000 and he left 8000, enormous depletion of wealth for Americans and their corporations. Disaster because pubs can’t govern.
Report Post »kaydeebeau
Posted on July 27, 2012 at 11:10amAhhh another report from the Ministry of Propaganda ….your eyes are getting heavy, you are very relaxed….. when I count to 3 you will no longer accept as true what you really live and see or hear around you……
Report Post »Rothbardian_in_the_Cleve
Posted on July 27, 2012 at 11:13amWe’ve always been at war with East Asia. We’ve never been at war with Eurasia.
Report Post »kaydeebeau
Posted on July 27, 2012 at 2:04pmBig Brother is that you? :)
Report Post »Gonzo
Posted on July 27, 2012 at 10:59am“Fed officials are now saying The Great recession wasn’t quite as horrendous as previously thought.” Wait a second…doesn’t Barry tell us 5 times a week that it was worse than ANYONE thought?
Report Post »kaydeebeau
Posted on July 27, 2012 at 11:11amGood catch….
Report Post »Rothbardian_in_the_Cleve
Posted on July 27, 2012 at 11:12amThe Fed is simply setting out to rewrite history to make itself that that much more the savior. All this does is delay QE3. Wealth and Money equal debt. In Q2 for every dollar of GDP we “improved by” we spend 2.33 in new debt to get it. The entire system is unsustainable and will collapse. As soon as people realize that money is debt then they will begin to act rational and the defection postulate of Nash game theory kicks in. People lose confidence and refuse to participate in the “system”. The system only works if we are all wage slaves. Once we say no mas the jig is up. It probably won’t be us though. We are spineless sheep. More likely our kids or grandkids. Sooner or later there will be a generation with backbone.
Report Post »The Jewish Avenger
Posted on July 27, 2012 at 11:42am“wasn’t quite as horrendous”
I didn’t realize there were different levels of horrendous…
hor·ren·dous /həˈrendəs/
Adjective:
Extremely unpleasant, hideous, dreadful, horrifying, or terrible.
All of you in Detroit!: Unemployed? No ability to protect yourself? Government not supplying the protection they promised? House next door selling for a buck but you’d rather get rid of the meth lab thats in it?
Too bad, you’re “NOT AS HORRENDOUS AS WE THOUGHT”
idiots…
Report Post »Rothbardian_in_the_Cleve
Posted on July 27, 2012 at 10:55am“The U.S. economy has never been so sluggish this long into a recovery.”
Maybe because it wasn’t a recovery. Ya think?
Report Post »historyguy48
Posted on July 27, 2012 at 1:59pmComrade, Dear Leader announced Recovery Summer last year so we must be in a recovery. Everyone knows that Dear Leader wouldn’t lie to us, unless his lips are moving.
Report Post »