Stocks and exchange traded funds (ETFs) got a nice temporary boost this morning after reports this morning that the nation’s gross domestic product (GDP) grew 5.7% in the fourth quarter. It was the fastest pace since 2003. Despite trading up more the 100 points, the Dow soon gave up most of those gains.
The economy grew at a pace faster than anyone expected in the final quarter of 2009. The 5.7% growth rate is a pace not seen since 2003, reports Christopher S. Rugaber for the Associated Press. It was also the second consecutive quarter of growth. Despite the strong numbers, economists expect growth to be slow this year as stimulus winds down and companies restock inventory.
President Barack Obama is making good on his promise to find ways to boost unemployment. The newest initiative entails a temporary tax credit for small businesses to encourage hiring of new employees, reports Robb Mandelbaum for The New York Times. Under this proposal, each new hire would net a small firm up to a $5,000 tax credit. Companies will also be rewarded for giving raises that exceed the rate of inflation.
News of U.S. economic growth drove energy prices higher this morning. The economic expansion possibly signals that more Americans may soon begin increasing their energy consumption, says Chris Kahn for the Associated Press. We’re still burning less gas than a year ago, and the consumption of petroleum products has declined for four consecutive weeks. The Energy Select Sector SPDR (NYSEArca: XLE) is flat this morning. [For more stories on the energy sector, go here.]
The U.S. dollar is on an uptrend today, reaching its strongest level since August against other major currencies. Meanwhile, the euro hit a six-month low against the greenback, reports Bradley Davis for The Wall Street Journal. PowerShares DB U.S. Dollar Bullish (NYSEArca: UUP) is up 0.6% this morning. [For more stories on the U.S. dollar, go here.]
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.