US Stock Market Recap: Stocks Tumble On GDP Contraction

For the second day in a row, the markets tumbled on bad news that a plan to help banks of their money loosing assets may be put on hold.  The Dow Jones Industrial Average (^DJI) fell 1.82% today closing at 8,000.86 while the Nasdaq (^IXIC) and S&P (^GSPC) decreased 2.08% and 2.28% respectively to levels of 1,476.42 and 825.88.  Contrary to the market retraction, crude oil rose $0.20 settling at $41.64 while gold increased $23.0 to $929.50.  Negative economic data was released to, noting a 3.8% retraction in GDP in which the economy shrank its fastest pace in over 27 years for the fourth quarter.  The Commerce Department released consumer spending numbers, reporting a  fall of 3.5%, while spending on durable goods plunged 22.4%.

Exxon Mobile Corporation (XOM) reported earnings today in which their net income fell 33% in the fourth quarter as production dropped and capital spending rose.  Exxon’s capital and exploration spending rose 11% to $6.8 billion while their oil equivalent production fell 3%.  Despite their weak fourth quarter earnings, they posted a year ended 2008 record profit of $45 billion noting record oil prices of $147 a barrel earlier this year.

Chevron Corp. (CVX) also reported earnings per share of $2.44 from $2.32 a year before, helped by a $600 million gain on an asset exchange transaction as well as a $478 million boost from their currency exchange.  Chevron’s fourth quarter earnings for their downstream business improved as the lower cost of crude oil feed stocks helped boost margins on the sale of gasoline and other refined products.

Not all news bombarded the market today as Procter & Gamble Co. (PG) announced diluted earnings per share of $1.58 which fell in line with Wall Street expectations.  P&G earned $5 billion this year compared to $3.27 billion a year before mostly due to a 63 cent per share gain from their Folgers deal with Orville boosting their coffee business this past year.  They have, although, dropped its earnings projection for the full year as they expect total sales to fall in the current quarter and possibly for the year.

Disclosure: The mutual fund the author is associated with is long XOM.

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