US economy shrinks at 32.9% annual rate in 2Q
FOX Business Cheryl Casone breaks down second-quarter GDP and initial jobless claims.
U.S. equity markets sank Thursday after the country's economy shrank the most in recorded history during lockdowns to curb the spread of the COVID-19 pandemic.
Continue Reading Below
The Dow Jones Industrial Average fell as many as 547 points, or 2.06 percent while the S&P 500 and the Nasdaq Composite dropped 1.67 percent and 1.2 percent, respectively.
|I:DJI||DOW JONES AVERAGES||26111.38||-428.19||-1.61%|
|I:COMP||NASDAQ COMPOSITE INDEX||10433.49198||-109.45||-1.04%|
U.S. gross domestic product, or GDP, tumbled by an annualized rate of 32.9 percent in the three months through June, a mammoth decrease that was still slightly better than the 34.1 percent drop that analysts surveyed by Refinitiv were expecting.
Initial jobless claims, meanwhile, rose by 1.434 million, meaning there have been more than 54 million first-time unemployment filings since mid-March. Continuing claims rose from 16.15 million to 17.02 million.
Looking at stocks, Dow component Procter & Gamble Co. reported better-than-expected top- and bottom-line results as COVID-19 boosted demand for cleaning products.
|PG||PROCTER & GAMBLE COMPANY||130.50||+2.19||+1.71%|
|UPS||UNITED PARCEL SERVICE INC.||139.40||+15.72||+12.71%|
Elsewhere on the earnings front, United Parcel Service said average daily volume grew by a record 23 percent to 21.1 million packages amid a spike in residential demand.
Royal Dutch Shell Plc. booked a $16.8 billion writedown and reported profit in the three months through June plunged 82 percent as the COVID-19 pandemic led to a sharp drop in oil demand and prices.
|RDS.A||ROYAL DUTCH SHELL PLC||30.51||-1.90||-5.87%|
|DNKN||DUNKIN BRANDS GROUP||67.25||-4.43||-6.19%|
Dunkin Brands Group said quarterly profit fell 23 percent year-over-year, but the company’s board of directors reinstated the 40.25 cents-per-share dividend amid signs that market conditions are improving.
Tech giants Amazon Inc., Apple Inc., Alphabet Inc. and Facebook, Inc. will all report after the closing bell. The CEOs of all four companies testified about their competitive practices at a congressional hearing on Wednesday.
Eastman Kodak shares, meanwhile, remain in focus after the company on Tuesday morning announced a pivot in to the drug industry. Shares were up 1,177 percent over the last two trading sessions.
|KODK||EASTMAN KODAK CO.||37.87||+4.67||+14.07%|
Looking at commodities, West Texas Intermediate crude oil shed $1.54 to $39.73 per barrel while gold slid $5.50 to $1,947.90 an ounce.
U.S. Treasurys gained, pushing the yield on the 10-year note down by 3.2 basis points to 0.549 percent, its lowest level in more than three months.
CLICK HERE TO READ MORE ON FOX BUSINESS
In Europe, Germany’s DAX paced the decline, down 4 percent, after government data showed the country’s economy contracted by 10.1 percent in the second quarter, the most on record. Elsewhere in the region, Britain’s FTSE was off 2.89 percent while France’s CAC was weaker by 2.59 percent.
Asian markets were lower across the board with Hong Kong’s Hang Seng down 0.69 percent, Japan’s Nikkei falling 0.26 percent and China’s Shanghai Composite slipping 0.24 percent.
Source: Read Full Article