By James Langton
(July 28 – 09:00 ET) – U.S. gross domestic product for the second quarter today came in at 5.2%, far above economists’ expectations of 3.9%. First quarter growth was revised lower, however.
The number seems to indicate the U.S. economy isn’t slowing and Fed rate jitters may resurface, although others argue the number shows that productivity increases continue to emerge. Nevertheless, futures traders sold U.S. equities on the news.
There is no economic data scheduled for release in Canada today.
In Europe, stocks are mixed once again. The FTSE is up 22 points to 6374 and the DAX is up 17 points to 7200. The CAC 40 lost 37 to 6474 after it was announced that unemployment is down in France to 9.6%, its lowest level in nine years.
In M&A news, Granada Media PLC is set to buy United News & Media PLC’s stake in Independent Television for £1.75 billion (about US$2.65 billion).
In global banking news, Bank of America Corp. says it’s planning to cut up to 10,000 jobs, about 7% of its workforce, to reduce costs. Lloyds TSB reports its first-half profit rose 12% due to its insurance and fund management subsidiaries. The company said its chairman will retire in April.
In Asia, stocks closed the week down as tech shares sold off. The Nikkei closed off 343 points to 15838. The Hang Seng dropped 266 points to 17183.
In earnings news, Abitibi-Consolidated Inc. is reporting second quarter earnings of 15¢ a share, up from 14¢ in 1999. Hollinger International Inc. is reporting earnings of 24¢ a share in the second quarter, up from 21¢ in the same period last year. Precision Drilling Corp.’s second quarter earnings rose to 14¢ a share from 5¢ a year earlier, and Trilon Financial Corp. saw its per-share profit rise to 31¢ from 27¢.
Barrick Gold said its offer for Pangea Goldfields Inc. was successful and over 90% of the common shares of Pangea have been taken up at $7 each. Barrick will now exercise its right to buy the remainder of the stock.