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Apr 29

Wall Street Drops right along with GDP Growth

Posted by Bill at 08:30 | Others | Comments(0) | Reads(5638)
Recently released US data is showing what several nationally recognized economist expected, which is a slowdown in the economy. Many companies stated that commodities prices; and especially oil, were eating away at their earnings.

Because of this, Wall Street moved lower last week, although NASDAQ stayed close to its 10 year high. Other information that came in suggesting this trend will continue is an unexpected rise in unemployment benefits to their highest levels since January.

One influential market analysis believes that as more data becomes available about the economy over the next few weeks, it will provide the figures required to determine if this will be a trend, or just a temporary slowdown for Wall Street.

Food prices have also increased sharply lately, which is leading to anxiety over inflation also following suit. Growth in the US economy has now slowed to 1.8%, as compared to the 2% which was forecasted.

The Feds chairman, Alan Greenspan held his first news conference and announced that he expected interest rates to stay low until June, which helped NASDAQ continue its momentum. Procter & Gamble Co (PG.N) stated that is was lowering its earnings forecast due to higher raw material cost, which were eating away at its bottom line.

Another announcement by Starbucks Corp (SBUX.O) also put a shiver into investors, when it stated that its profits would also be down due to higher than expected cost. Because of this, its shares fell 1% in trading for the day.

It is all too early to tell where this information is going to lead Wall Street in the near future. But, with the ever spreading tension in the Middle East, there does not seem like there will be a drop in oil prices anytime in the near future.

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