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Morning Market Roundup: Econ Slowdown, Feds Say Recession Not so Bad, Facebook Down


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 sayingThe Greatrecession 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.

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