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By: Money Morning
November 29, 2012 at 12:43 PM EST
Stock Market Today: GDP Revised Higher, but Data Still Ugly
The stock market today opened higher as third-quarter U.S. gross domestic product (GDP) was revised from its original 2.0% reading to 2.7%. The market boost could reverse depending on what happens after key political figures meet in Washington today to discuss the fiscal cliff. Here's a closer look: GDP lifted for all the wrong reasons - Today the U.S. Commerce Department reported its second estimate for third-quarter GDP, and at first glance the 2.7% revision seems to indicate growth after the second quarter's dismal 1.3% level. Yet, today's number missed estimates which called for 2.8% growth, and was driven largely by government spending which accounted for 0.67 percentage points of the reading and inventories which contributed 0.77 percentage points. This was the first positive reading for government spending in over two years and the increased inventories suggest businesses could limit production in the fourth-quarter, especially with the looming fiscal cliff . To continue reading, please click here...
The stock market today opened higher as third-quarter U.S. gross domestic product (GDP) was revised from its original 2.0% reading to 2.7%. The market boost could reverse depending on what happens after key political figures meet in Washington today to discuss the fiscal cliff.
Further analysis of today's reading shows that household purchases grew at a 1.4% rate, the lowest in more than a year, and personal consumption, which is supposed to reflect 70% of the U.S. economy, only made up 36% of the 2.7% headline number.
"We're just muddling through," Brian Jones, a senior U.S. economist at Societe Generale in New York told Bloomberg News. "The mix between final demand and inventories was far less favorable. The consumer spending numbers are a reflection of the fact that job growth remains sluggish."
The markets have welcomed any positive remarks that have surfaced regarding the fiscal cliff and many are hopeful a deal can be reached. But so far all we've heard from recent discussions are generic, meaningless statements, and today will be a key indication if any actual progress is being made.
Editors Note: While Washington duels over fiscal cliff, you can get your money prepared for any outcome with these steps.
Prior to the outcomes of these key meetings here are today's biggest market movers:
As of noon the Dow Jones was up 3 points, or 0.02%, and the S&P 500 was up 2.05 points, or 0.15%.
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