gdp report


US Stocks Futures Sink Into Red After GDP Report; DJIA Down 4,
NEW YORK (MarketWatch) -- U.S. stock futures fell into the red after the Commerce Department's first estimate of second-quarter gross domestic product, despite a smaller decline in the measure than the Street expected.

Consumer spending dropped, disappointing the market. Consumer spending had gained slightly in the first quarter.

Gross domestic product fell at a seasonably adjusted 1% annual rate in April through June, smaller than its 6.4% contraction in the first quarter and its 5.4% decline in the fourth quarter. Wall Street expected a bigger decline in second-quarter GDP, and economists surveyed by Dow Jones Newswires projected a 1.5% decrease.

Ahead of the report, Dow Jones Industrial Average futures had been up about 56 points. Following the release, the gains were pared and sunk into the red, with Dow futures recently down 11 points to 9079.

The report showed a big engine of the economy, consumer spending, decelerated in the spring. Fear for jobs is keeping wallets tight and seen muting the economy's expected recovery in the second half. Friday's data showed spending slid by 1.2% in April through June, after increasing 0.6% in the first and dropping 3.1% in the fourth quarter.

What cut the rate of contraction in GDP during the second quarter were much smaller declines in exports and business spending. Also, inventory liquidation took less of a bite out of the economy; company replenishing of goods should boost output going forward.

The government's price index for personal consumption expenditures climbed 1.3% after falling 1.5% in the first quarter. The measure of how much consumer spend rose 2% excluding food and energy, after increasing 1.1% in the first quarter.

For the current quarter, which July 1, economists are expecting a rise in GDP, suggesting the recession is at or near its end.