STOCKS FALL AFTER GDP DISAPPOINTS: Here's What You Need To Know

thenews 2013.01.30 21:18

Markets sold off a bit today.

First the scoreboard:

Dow: 13,910, -44.0, -0.3 percent
S&P 500: 1,501, -5.8, -0.3 percent

NASDAQ: 3,142, -11.3, -0.3 percent

And now the top stories:

This morning, the Bureau of Economic Analysis published its first reading of Q4 2012 GDP. And it was a stunner. According to their measure, GDP unexpectedly fell by 0.1 percent. Economists were looking for a 1.1 percent growth rate.
Government spending was the main driver of contraction, subtracting 1.33 percentage points from Q4 GDP growth and falling 6.6 percent. Federal spending fell 15.0 percent, led by a 22.2 percent drop in defense spending.
Bank of America economist Michelle Meyer noted that today's GDP report was "grossly distorted" by government spending and inventories. "Outside of these two very volatile components, underlying growth improved with a solid gain in business investment," she wrote. "We believe today’s report suggests upside risk to our forecast of 1.0% for Q1 GDP."