The first estimate of second quarter GDP growth came out at 3.4% today with the rise in personal consumption falling to 3.3%. Although the numbers came out below the Bloomberg estimates, it was still the ninth consecutive month of growth above 3%, a feat last achieved in 1986. Also, being only the first release, there are still two more opportunities for revisions.
In a later release, the Chicago area’s PMI completely blew estimates of 55.5 out of the water with a rise to 63.5 from 53.6. The jump came from monthly improvements in production, new orders, and backlogs. Overall, the report was very supportive of both current growth and manufacturing conditions in the next few months.
Equities were higher briefly after the Chicago report, but eventually buckled under the GDP data. Shortly before noon, the Dow Jones Industrial Average was down 34.55, or 0.32%, to 10,671.00. The NASDAQ was down 7.35, or 0.33%, to 2,191.09. Finally, the S&P 500 was down 4.44, or 0.36%, to 1,239.28. For the most part, the indexes look like they are headed for another weekly gain.
Along with a report of 70% higher profit in first quarter, Symantec Corp. also lowered their full-year outlook on an expectation of lower sales due to the stronger dollar. This sent shares tumbling in overnight trading. By early afternoon, the stock was trading down $1.86, or 7.82%, to $21.93.
Also, Chevron Corp. and Unocal Corp. both released earnings. Chevron reported a decrease in second quarter profit of 11%, but this was still higher than analyst estimates. Meanwhile, Unocal posted the highest quarterly earnings in the company’s history of $1.73 a share while the firmed earned only $1.25 a share in the second quarter of last year. At 16:40 GMT Chevron was down $0.41, or 0.70%, to $58.53 while Unocal was $0.37, or 0.57% lower, at $64.83. The takeover bid between the two companies is still scheduled for a vote on August 10.
The morning’s economic news got more of a reaction out of U.S. Treasuries. Since the figures still supported further Fed rate hikes, Treasuries fell today. The yield on the 10-year note rose 6 basis points, or .06 percentage points, to 4.26 percent by 16:45 GMT.