The GDP grew at an anemic 1.3% in the 2nd Quarter from April-June.
Interesting article below about corporate insiders who are selling their companies' shares at an abnormally fast pace.
Here are the top financial stories of the day:
1) Wall Street ends worst week in year on debt stalemate-From Reuters
Stocks ended the worst week in a year as time runs out on Washington to reach agreement before the government loses its ability to borrow money.
The S&P 500 fell every day this week and was down 3.9 percent for the week as legislators failed to work out an agreement to raise the federal borrowing limit, which expires on Tuesday. Investors also worry about the likelihood of a U.S. credit downgrade.
The CBOE Market Volatility Index (Chicago Options:^VIX - News), a gauge of investor fear, jumped as much as 9 percent to its highest level since mid-March before paring its rise.
Natalie Trunow, chief investment officer of equities at Calvert Investment Management in Bethesda,
Maryland, said investors are taking a more defensive stance, possibly moving more into cash.
"It's frustrating for investors and for U.S. citizens to see this unfold in the way it has been," she said.
"From an overall asset allocation standpoint, in an environment like this, you get bigger moves into cash and safe havens."
The Dow Jones industrial average (DJI:^DJI - News) was down 96.87 points, or 0.79 percent, at 12,143.24. The Standard & Poor's 500 Index (^SPX - News) was down 8.39 points, or 0.65 percent, at 1,292.28. The Nasdaq Composite Index (Nasdaq:^IXIC - News) was down 9.87 points, or 0.36 percent, at 2,756.38.
U.S. President Barack Obama told Republicans and Democrats to find a way "out of this mess." The United States will be unable to borrow money to pay its bills if Congress does not raise the debt limit by August 2.
A second attempt for a vote in the House of Representatives is expected after the close of trading on Friday after a bill was modified to try to win over more conservative lawmakers. The measure has little chance of passing in the Senate, however.
At least one credit rating agency has said it is likely to lower the United States' prized tripe-A rating if the cuts in Washington don't go far enough.
"Will the deal be enough to satisfy the credit rating agencies is really what's at stake here," Trunow said, whose firm manages about $14.8 billion.
The S&P utility index (^GSPU - News) is down 2.1 percent for the week, while the Dow is down 4.2 percent and the Nasdaq is down 3.6 percent for the week.
Major indexes also posted losses for the month: the Dow and S&P 500 each lost 2.2 percent while the Nasdaq fell 0.6 percent.
The S&P 500 briefly fell below its 200-day moving average, seen as key support, and bounced back from its worst levels of the day.
Weak economic data also weighed on equities. The U.S. economy stumbled badly in the first half of this year and came dangerously close to contracting in the January-March period.
Among declining stocks, Chevron Corp (NYSE:CVX - News), the second-largest U.S. oil company, fell 1 percent to $104.02 despite reporting a 43 percent jump in quarterly profit that beat estimates.
Energy led declines on the Dow on Friday, but the industrial sector was among the hardest hit for the week.
The S&P industrial sector (^GSPI - News) lost 6.1 percent this week, following disappointing results from companies including Illinois Tool Works (NYSE:ITW - News).
2) Weak growth raises concerns on economy-From Reuters
The U.S. economy came perilously close to flat-lining in the first quarter and grew at a meager 1.3 percent annual rate in the April-June period as consumer spending barely rose.
The Commerce Department data on Friday also showed the current lull in the economy began earlier than had been thought, with the growth losing steam late last year.
That could raise questions on the long held view by both Federal Reserve officials and independent economists that the slowdown in growth as the year started was largely the result of transitory factors.
Growth in gross domestic product -- a measure of all goods and services produced within U.S. borders - rose at a 1.3 percent annual rate. First-quarter output was sharply revised down to a 0.4 percent pace from a 1.9 percent increase.
Economists had expected the economy to expand at a 1.8 percent rate in the second quarter. Fourth-quarter growth was revised to a 2.3 percent rate from 3.1 percent.
"The second quarter disappointed, but the first-quarter downward revision is more disturbing. It advances the pangs of concern. The debt ceiling nonsense is not going to help us. We're already in an economy that is subpar," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"Gasoline price increasing from $3 to $4, that really slapped the consumer back considerably."U.S. stock index futures added to losses and government debt prices extended gains after the weak GDP data. The dollar fell to a four-month low against the yen, while the Swiss franc hit a record high against the greenback.
3) Insiders Selling at Unusually Fast Pace-From MarketWatch
Bad news, stock-market bulls: Corporate insiders are selling their companies' shares at an abnormally fast pace.
In fact, one measure of that selling activity shows insiders of NYSE- and AMEX-listed companies recently were selling at the fastest rate since data began being collected in the early 1970s, four decades ago.
On the theory that insiders know more about their companies' prospects than do the rest of us, this is an ominous sign.
Corporate insiders, of course, are a company's officers, directors and largest shareholders. They are required to file a report with the Securities and Exchange Commission more or less immediately upon buying or selling shares of their companies, and the SEC makes those reports public.
One firm that gathers and analyzes the data is Argus Research, which publishes its findings in the Vickers Weekly Insider Report. One indicator that the firm calculates is a ratio of the number of shares that insiders have sold in the open market to the number that they have purchased.
In the week ending last Friday, according to the latest issue of the Vickers report, this sell-to-buy ratio stood at 6.43 to 1. This is higher than 95% of other weeks' readings over the last decade.
That's ominous enough, but consider last week's sell-to-buy ratio for just those issues listed on the NYSE or AMEX. That came in at 13.10 to 1, which is the highest reading for this ratio since when Vickers began collecting the data, which was October 1974.
Is there any way for a bull to wriggle out from underneath the weight of these high readings? Perhaps, though it's not easy.
One counterargument bulls can make is that it's entirely normal for insiders to sell when the market rallies, and therefore such selling does not carry particularly bearish significance.
But the stock market hasn't exactly been rallying all that strongly. To be sure, the latest sell-to-buy ratio reflects last week, not the current one, and that week did have a better tone than the current one — but not all that great a tone.
In any case, the other occasions in recent years in which the sell-to-buy ratio rose to close to the same level it is today were on the heels of more or less uninterrupted rallies over the previous two or three months. That's not the case now, of course, suggesting that insider selling this time around may not be so benign.
Another bullish counterargument is that the volume of insider transactions last week was light, as it usually is during earnings season. That's because insiders are either reticent to buy or sell their companies' shares in the days and weeks before their companies report earnings, for fear of being charged with acting improperly.
But I'm not sure how much weight to put on this argument. There still were several hundred firms with insider activity last week, and it's unclear why earnings season would have discouraged just those insiders who otherwise were interested in buying.
Furthermore, it's worth remembering that the extensive Vickers database encompasses many other earnings seasons besides the current one. Also, the latest insider sell-to-buy ratio is higher than almost all comparable readings from those prior seasons.
Perhaps the strongest counterargument the bulls can muster at this point is that the insiders are not infallible.
That indeed is true. Still, researchers report that they have been more right than wrong.
At a minimum, I think we can all agree it can't be good news that insiders recently have been selling at such a fast pace.
Quote of the Day from Dave Ramsey.com:
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