U.S. stocks and exchange traded funds (ETFs) continued to remain strong as the month ends on encouraging economic news and earnings reports.
The Commerce Department reported that U.S. GDP contracted at a pace of 1% from April to June, signaling that the recession is easing up. This barometer of the nation’s health has now contracted four straight quarters for the first time on record, dating to 1947, The reading was better than the 1.5% annualized contraction expected.
The fate of the government’s “cash for clunkers” program appears to be up in the air. Many are glad to receive a little extra cash for their clunkers, but it is unclear just how much longer the program will be in existence. It appears that just after one week of being implemented, the program has exhausted its $1 billion allocation. This morning, official CARS.gov Web Site indicated that $780 million remained in the coffers, states Jennifer Liberto and Peter Valdes-Dapena of CNN Money.
In the earnings world, Chevron (CVX) reported a decline in second-quarter earnings of 71%. This was well below Wall Street’s expectations of $0.97/share and was driven by many forces, including a decline of 79% from its oil and gas production arm. The news sent the iShares Dow Jones U.S. Energy (IYE) down nearly 0.3% in morning trading.
In the media arena, the Washington Post (WPO) reported a second-quarter profit and, unlike most other companies, didn’t come from cost-cutting measures. It relied on its other business to get it through the media slump. The news sent the PowerShares Dynamic Media (PBS) up nearly 1% in morning trading.