Despite more signs that the economy is stabilizing, investor concern sent stocks and exchange traded funds (ETFs) down in early morning trading. By midday, Wall Street was trading nearly flat.
The latest report from the Labor Department stating first-time jobless claims fell 10,000 last week to 570,000, a hair above economists’ expectations of 565,00. Those who continue to file unemployment claims fell more than expected to 6.13 million, lower then the 6.2 million forecast, reports Shobhana Chandra for Bloomberg.
The Commerce Department reported that U.S. GDP shrank by 1% annualized in the second quarter. The number, which represents the value of goods and services produced within the United States, was a better than the 1.5% decline anticipated by economists. What appears to be most promising with the report is that revisions showed smaller dips in consumer spending, exports and housing construction, reports Martin Crutsinger of the Associated Press.
In the aerospace sector, airplane manufacturer Boeing (BA) announced that its long-delayed 787 jetliner will be ready for a test flight by year’s end. The company has witnessed various false starts and production delays, however, the 787 remains to be the best-selling new plane and is expected to be profitable. The news sent the PowerShares Aerospace & Defense (PPA) up 1% in morning trading.
The recovery worries further trickled down to the oil markets as crude oil fell to around $71/barrel on the New York Mercantile Exchange. Additionally, a report by the Energy Department showed that U.S. crude stockpiles grew by 200,000 barrels for the week ending Aug. 21, putting pressures on supply and demand, states Carlo Piovano of the Associated Press. The United States Oil Fund (USO) was down 1.6% in intraday trading.
Overall, all three major indexes were down in morning trading with the Dow Jones Industrial Average dropping 0.4%, the S&P 500 declining by 0.8% and the Nasdaq giving up 1.1%.
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Kevin Grewal contributed to this article.