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Sluggish economy, sluggish markets

Friday, Apr 26, 2013 - 02:08

April 26 - Summary of business headlines: Dow rises, but stocks falter on weaker-than-expected GDP report; consumer sentiment weakens in April; Burger King’s results not bad as feared, Chevron tops forecast; Amazon sinks on outlook; J.C. Penney surges on Soros stake. Conway G. Gittens reports.

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Investors found little reason to change strategies after economic growth failed to live up to expectations. The Dow rose for the fifth time in six sessions, but the rest of the market stopped at a five-day winning streak. For the week: Blue chips rallied 1.1 percent and the Nasdaq gained 2.3 percent Economic growth came in at annual rate of 2-1/2 percent, which was way faster than the fourth quarter, but slower than the Wall Street was predicting. Consumer spending and housing were positives, but a cut-back in government spending continues to place a drag and is likely to weigh further as sequestration plays out. Beth Ann Bovino of Standard and Poor's: SOUNDBITE: BETH ANN BOVINO, SENIOR ECONOMIST, STANDARD & POOR'S (ENGLISH) SAYING: "I am expecting some compromise probably closer to into maybe the third quarter when the debt ceiling comes back to play and also the continuing resolution is also at play." In another snapshot of the economy - consumer sentiment fell in April with Americans worried about jobs and their financial standings. On the earnings front: sales at Burger King tumbled 42-1/2 percent in the first three months of the year (which wasn't as bad as feared by the way.) Chevron beat profit forecasts despite lower oil prices - one of the few companies reporting so far that's benefitted from currency fluctuations. Negative response to's outlook given out the day before; the online retailer is ramping up spending on new digital media content. Looking at the reaction - Amazon shares were down more than 7 percent. Chevron and Burger King - up more than a percent on the day. Summing up earnings season, which is just over half-done, the number of companies beating profits forecasts - tracking ahead of the historical norm. But the number missing sales forecast is worse than what happens typically, according to data from Thomson Reuters I/B/E/S. Outside of earnings, J.C. Penney surging 11-1/2 percent one-day after learning George Soros is now one of its biggest shareholders. Wrapping up the day in Europe - stocks dipped but it still was the best weekly gain in five months.

Sluggish economy, sluggish markets

Friday, Apr 26, 2013 - 02:08

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