Futures sagged today after GDP numbers for several countries fell.
Japan's economy continued to shrink in the fourth quarter by 0.1%, a narrower dive from a 1.0% fall in the third quarter. Economists expected Japan to show a small amount of growth. Germany's contraction helped deepen the recession in the eurozone. German GDP dropped 0.6%, mostly on weak export demand. The eurozone economy as a whole shrank 0.6%, the fastest rate since 2009. For the full year, the eurozone showed sub-zero growth.
The French economy fared worse than expected as well, contracting by 0.3% after growing 0.2% in the previous quarter. Italy's recession deepened by 0.9% after dropping 0.2% in the third quarter. Even the usually stalwart Dutch economy dropped by 0.2%.
The European core fared badly enough, but the periphery countries are still crippled. Portugal's economy contracted by 1.8% after shrinking 0.9% in the third quarter. Greece's economy fell 6% on a yearly basis (the country does not publish quarterly figures) as unemployment increased to 27%. Europe's number one bailout candidate, Cyprus, shrank by 1%, extending its recession from the 0.7% contraction in the third quarter.
Initial claims for unemployment insurance in the United States dropped by 27,000 to 341,000 last week.
European shares sold off today, though Asian markets did not react negatively to the poor GDP figures. US stock index futures are lower, however, indicating that equities might decline over the trading day. Dow
(INDEXDJX:.DJI) futures were down 0.43% at 13,898. Futures contracts on the S&P 500
(INDEXSP:.INX) declined 0.34% to 1,511.80 and Nasdaq
(INDEXNASDAQ:.IXIC) futures slipped 0.39% to 2,759.50.
In corporate news. Pepsico
(NYSE:PEP) shares rose 1.9% after the company reported net profit of $1.06 per share on $19.95 billion in sales.
(PINK:AAMRQ) and US Airways Group
(NYSE:LCC) announced that the two companies will merge, forming the world's biggest airline worth $11 billion.
(NASDAQ:CSCO) shares fell in the pre-market despite reporting that net profit rose 44% to $3.14 billion in the company's fiscal second quarter. Earnings per share totaled $0.51, beating analyst estimates. Revenue also rose 5% to $12.1 billion, missing estimates by $100 million. For the current quarter, Cisco expects sales to grow between 4% and 6% from the year-earlier. missing Wall Street's expectation of 5.3% sales growth.
The Bank of Japan left rates at 0-0.01% at its latest meeting. The bank's asset purchase program remains unchanged at 101 trillion yen. After Governor Masaaki Shirakawa's resignation and the recent GDP numbers, the bank's next statement might include some aggressive monetary moves.
reports that foreclosures in the US dropped 28% on a yearly basis to a six-year low in December, thanks to homeowner protection regulations in California.
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