Wednesday, April 29, 2009

Quick Notes for the Day - April 29

GDP Down More Than Estimated, But With a Bright Spot - The U.S. economy contracted again in the first quarter of the year as business investment declined at a record rate, the Commerce Department reported Wednesday. Real gross domestic product fell at a 6.1% annualized rate in the first quarter, nearly matching the 6.3% decline in the fourth quarter of 2008. The interesting issue was the news from the business sector. Companies halted new investments, and shed workers and inventories to bring down production and stockpiles to match the lower demand from U.S. and foreign markets. Consumers did better than expected, so this was a bright spot to the report.

Consumer Spending Up - Retail stocks opened higher Wednesday as the Commerce Department data showed a rebound in consumer spending while the U.S. economy contracted again in the first quarter. The S&P Retail Index rose 0.6%.

Citi Asks For Approval of Special Bonuses - Citigroup is seeking U.S. Treasury approval to pay special bonuses to several key employees at the bank, The Wall Street Journal reported Wednesday, citing people familiar with the matter. The report said Citi wants to pay the stock-based bonuses to staff at its Phibro trading unit to keep them from defecting. Phibro has produced steady profits for the firm throughout the credit and market crises of the last 2 years, and, according to the Journal, Citi paid its chief Andrew Hall close to $100 million last year. The report said Citi CEO Vikram Pandit raised the issue in a meeting earlier this month with Treasury Secretary Timothy Geithner. The report said Geithner has not made a decision on the matter.

Oil Inventories Rise, Gasoline Inventories Fall - U.S. crude-oil inventories rose more than expected last week, but gasoline stockpiles had a surprising decline, the EIA reported Wednesday. Crude inventories increased by 4.1 million barrels in the week ended April 24, while gasoline inventories decreased by 4.7 million. Analysts surveyed by Platts had expected an increase of 1.8 million barrels in crude and a rise of 900,000 barrels in gasoline supplies. The news sent oil prices higher by about $1.

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