Global stock markets had a rocky week as investors remained wary of Europe's credit problems, tighter financial sector regulation in the United States , rising tensions between North Korea and South Korea , and the possibility that the world recovery could be affected by any of these simmering challenges. On Thursday a three-day selloff turned into a rally after Chinapromised not to unload European debt.
U.S. economic news
U.S. growth revised lower; consumer spending stalls; profit growth slows
The U.S. economy grew 3.0% in the first quarter, less than the earlier 3.2% estimate, according to figures from the U.S. Department of Commerce. The pace was shown to be a bit weaker than originally thought after the government revised consumer and business spending lower. The numbers indicated that corporate profits grew at a slower pace in the first quarter. Profits before tax and with inventory and capital adjustments rose 5.5% in the first quarter, slower than the 8% rate in the fourth quarter. A separate report on Friday revealed that consumer spending unexpectedly stalled in April as Americans rebuilt savings. Purchases have not increased for the first time since September. Instead, the figures from the Commerce Department showed that the savings rate rose for the first time in four months, and incomes climbed 0.4%.
The U.S. economy grew 3.0% in the first quarter, less than the earlier 3.2% estimate, according to figures from the U.S. Department of Commerce. The pace was shown to be a bit weaker than originally thought after the government revised consumer and business spending lower. The numbers indicated that corporate profits grew at a slower pace in the first quarter. Profits before tax and with inventory and capital adjustments rose 5.5% in the first quarter, slower than the 8% rate in the fourth quarter. A separate report on Friday revealed that consumer spending unexpectedly stalled in April as Americans rebuilt savings. Purchases have not increased for the first time since September. Instead, the figures from the Commerce Department showed that the savings rate rose for the first time in four months, and incomes climbed 0.4%.
New unemployment claims fall
The number of U.S. workers filing new claims for unemployment benefits fell last week, but the drop was smaller than expected and did not signal any strong improvement in the labor market.
The number of U.S. workers filing new claims for unemployment benefits fell last week, but the drop was smaller than expected and did not signal any strong improvement in the labor market.
Sales of newly built homes soared 14.8% in April from March as buyers rushed to take advantage of the expiring government tax credit. Sales in April were 47.8% higher than a year earlier.
Durable goods orders rise
Orders for durable goods rose 2.9% in April from March, putting them 21.6% above the year- earlier level. That was the biggest annual gain since 1976. Orders for goods other than those associated with defense and aircraft fell 2.4% in April from March but were 23.5% higher than a year ago.
Orders for durable goods rose 2.9% in April from March, putting them 21.6% above the year- earlier level. That was the biggest annual gain since 1976. Orders for goods other than those associated with defense and aircraft fell 2.4% in April from March but were 23.5% higher than a year ago.
U.S. and global corporate news
The Dow Jones Industrial Average is on pace to close out its biggest monthly drop since February 2009 and its biggest May drop in history. The selloff snaps three straight months of gains. This month, which included a flash crash, has been very volatile, and we have seen the first major 10% correction in the U.S. stock market since a bull market began more than a year ago.
Apple surpassed Microsoft in market value on Wednesday as its value hit $222.1 billion, about $3 billion ahead of Microsoft. Over the last year, Apple's share price has nearly doubled.
Global economic news
OECD raises growth forecast
The Organization for Economic Cooperation and Development raised its forecast for economic growth this year and next. That forecast comes despite risks to recovery posed by European debt and possible overheating in some parts of Asia . The Paris-based think tank cited the strong growth in developing economies and rapid rebound in world trade, concluding that the combined output of the organization's 31 members will increase 2.7% this year and 2.8% next year.
The Organization for Economic Cooperation and Development raised its forecast for economic growth this year and next. That forecast comes despite risks to recovery posed by European debt and possible overheating in some parts of Asia . The Paris-based think tank cited the strong growth in developing economies and rapid rebound in world trade, concluding that the combined output of the organization's 31 members will increase 2.7% this year and 2.8% next year.
U.K. consumer confidence falls
U.K. consumer confidence unexpectedly fell to a five-month low in May as Britons faced the prospects of government spending cuts and became more pessimistic about the economic outlook.
U.K. consumer confidence unexpectedly fell to a five-month low in May as Britons faced the prospects of government spending cuts and became more pessimistic about the economic outlook.
Japan's jobless rate rises; household spending falls; and deflation deepens
Japan 's unemployment rate unexpectedly rose in April to 5.1% from 5.0%. During the same month, household spending fell and deflation deepened, signaling that domestic demand is damping the economic recovery. Other figures this week highlighted the country's continued dependence on exports to fuel recovery. Demand from Asia's emerging market countries helped Japan 's rise more than expected in April. Shipments abroad rose 40.4% from a year earlier, the fifth straight increase.
Japan 's unemployment rate unexpectedly rose in April to 5.1% from 5.0%. During the same month, household spending fell and deflation deepened, signaling that domestic demand is damping the economic recovery. Other figures this week highlighted the country's continued dependence on exports to fuel recovery. Demand from Asia's emerging market countries helped Japan 's rise more than expected in April. Shipments abroad rose 40.4% from a year earlier, the fifth straight increase.
European stocks recover after China denies sale of European bond holdings
European stocks and the euro rose Thursday after China denied it was considering the sale of European bond holdings. On Thursday China's State Administration of Foreign Exchange, the agency that manages the nation's massive reserves, said it had no plans to dump its eurozone government bond holdings, refuting a news report that it was considering such a move amid the region's fiscal problems.
European stocks and the euro rose Thursday after China denied it was considering the sale of European bond holdings. On Thursday China's State Administration of Foreign Exchange, the agency that manages the nation's massive reserves, said it had no plans to dump its eurozone government bond holdings, refuting a news report that it was considering such a move amid the region's fiscal problems.
