News That Moved Wednesday's Market

U.S. Markets

Dow -11.81 (-0.09%)
Nasdaq -13.30 (-0.55%)
S&P 500 -5.35 (-0.38%)

News That Moved the Market

Fed Cuts Quarter Point. The Federal Open Market Committee decided to cut interest rates to 2.00% Wednesday, and indicated in its statement it was ready to pause after seven cuts. Two members, Dallas Fed president Fisher and Philadelphia Fed President Plosser, dissented, favoring no change. In the statement, the Fed said it would "promote moderate growth over time," but left out the words "downside risks remain." This was a signal that the Fed looks ready to take a break. The Fed said it will continue to monitor inflationary pressures closely, but it did not take a hard stance on fighting inflation, nor did it rule out further cuts if needed. The market's reaction immediately after the announcement was positive, as the market really got what it was looking for, but the indexes faded later in the session, as buyers were unable to step up.

GDP Checks In Higher Than Expected. Gross domestic product expanded by 0.6%, beating estimates. The number received a bump from increasing inventories. "If you were to take out the swing in inventories, these numbers would be negative," MarkVitner, senior economist at Wachovia said. "We think we're in recession, but I don't know that the GDP numbers are going to turn negative at all in 2008."

GM Surges. GM (GM, +9.4%) reported a loss of $3.25 billion, but its adjusted EPS loss of $0.62/share beat expectations by nearly a buck. A record 64% of the company's sales were outside the U.S.

Quick Tics: After losing 3% total in the first three months this year, hedge funds returned 1.5% in April...For the month, the Dow (+4.5%), the S&P 500 (+4.7%), and the Nasdaq (+5.9) all finished with solid gains.

Tomorrow

Notable Earnings (Full List Here):
Burger King (BKC) Before Open
Comcast Corporation (CMCSA) Time Not Supplied
MetLife Inc. (MET) After Close
NYMex (NMX) Time Not Supplied
Sun Microsystems (JAVA) Time Not Supplied
Tyco International (TYC) Before Open

Economic Events:
Motor Vehicle Sales
8:30 AM: Personal Income and Outlays
8:30 AM: Jobless Claims
10:00 AM: ISM Mfg Index
10:00 AM: Construction Spending

Comments

[garlicbulb]

MarkVitner, senior economist at Wachovia said. "We think we're in recession, but I don't know that the GDP numbers are going to turn negative at all in 2008."

Duh.. If the GDP doesn't go negative then how can it be a recession?

Stalled economy I can believe

[roy.mehta]

Hey Garlicbulb,

Calling something a recession has become a tricky thing. You are right that Mr. Vitner is saying something strange in the quote, but that's why I thought it was interesting. There is the well known definition of what a recession is (two straight quarters with negative GDP), but does that really does that need to happen to say we are in a recession anymore? I think that has come up for debate recently. It "feels" like a recession to many Americans, is that enough? It looks as though it could be to Mr. Vitner, or at least that his (and perhaps Wachovia's) definition is not as rigid as the well-known definition. Also looking at other economic data, besides GDP, a case for recession could definitely be made.
Just my thoughts. Thanks for commenting Garlicbulb, hopefully some other people can share their thoughts.

[JREwing]

So, more precisely, we don't know what a recession is anymore. Why do we need to change the definition of recession anyhow?

A recession is two negative back to back quarters. Always have been, always will be that way.

The only reason some snake-oil-salesmen on TV think, they need to change that, is, that the samesnake-oil-salesmen predicted the economy would fall of a cliff and take on depression like character. Now that this isn't happening they redefine recession.

Ridiculous.

I find the whole argument 'recession or not' futile. One should look for companies, that perform and dump those, who don't. Period.

The rest is simply a justification for the existence of financial TV.

[Richard Schweitzer]

If the general public is nervous, or better yet "fearful," the more inclined they may be to "follow closely on the news." That should be good for viewerships, readership, etc. for the media. Thus most of the information disseminated tends in the direction of generating "concern," at least, and tensions in the optimum.

Better indications of economic conditions can be observed in the amount of "motion" of people and goods - "traffic" in the urban and ex-urban areas, on the highways, and even in the air. Freight loadings, truck mileages and loads, gallonage (not $ unit) gasoline sales are further indicators. The exchanges of services and goods among people continue, timings vary (retail sales).

America continues to improve its productivity. So, when the term "manufacturing&qu... is bandied about, be sure the term means employment, not output. Manufacturing output with reduced employment has risen steadily - check the stats - that's called increased productivity, producing more with less effort.

America is solid; Politically groggy or naive perhaps, but SOLID