Thursday, 27 June 2013

US growth slashed, stocks jump

US first quarter growth has been revised down. A report from the Commerce Department on Wednesday showed that the US economy grew at an annualised rate of 1.8 percent in the first quarter, less than the 2.4 percent rate previously reported.

The downward revision was mainly due to a reduction in the estimate of growth in consumer spending on services to 1.7 percent from the prior estimate of 3.1 percent.

In more positive news for consumer spending, another report on Wednesday from GfK showed that its consumer sentiment indicator for Germany will rise to 6.8 in July, the highest level since September 2007, from 6.5 in June.

Investors largely shrugged off the weaker-than-expected US GDP report. The S&P 500 rose 1.0 percent on Wednesday, pulling the MSCI All-Country World Index up by the same amount. Interbank lending rates in China fell, as did government bond yields around the world.

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