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By Jennifer Yousfi
The preliminary gross domestic product (GDP) figure for the fourth quarter of 2007 was 0.6%, unchanged from the advance figure, the Commerce Board reported. Analysts had expected a slight upward revision to 0.7% and the lower figure sent markets tumbling.
At noon ET today (Thursday), the three major U.S. stock indices had all posted losses. The blue-chip Dow Jones Industrial Average Index had a 130.17-point decline (-1.03%), to trade at 12,564.11. The tech-laden Nasdaq Composite Index slipped 25.10 points (-1.07%), to reach 2,328.68. And the broader Standard & Poor's 500 Index dropped 13.63 points (-0.99%), to settle at 1,366.39.
The energy sector, up 0.36%, was the only sector to eek out a slight gain. The financial sector, down 1.80%, and the transportation sector, down 1.68%, posted the largest declines.
In his second day of Congressional testimony, Federal Reserve Chairman Ben S. Bernanke acknowledged the difficulties the economy is facing.
"We are facing a situation where we have simultaneously a slowdown in the economy, stress in financial markets, and inflation pressures coming from these commodity prices abroad," Bernanke said.
However, the Fed Chief was quick to put stagflation concerns to rest as he does not feel "we are anywhere near the situation that prevailed in the 1970s."
"I don't anticipate stagflation," he said.
In overseas markets, Japan's Nikkei Index slipped 105.79 points to reach 13,925.51. Hong Kong's blue-chip Hang Seng Index increased 107.85 points to close at 24,591.69.
A strong yen is hurting Japanese exporters such as Toyota Motor Corp. (TM). Shares of the carmaker were down in afternoon trading.
At midday, the dollar had lost ground against the euro [down 0.837%], the yen [down 0.844%] and the pound sterling [down 0.106%].
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