Briefing.com Intraday Commentary

[BRIEFING.COM] Sellers claimed control of the stock market for the second straight session, pushing the S&P 500 2.3% lower Friday. That left stocks down 0.7% for the week.

Stocks actually began the session with a gain after investors reacted positively to a better-than-feared GDP report. However, a closer look at the data revealed conditions are hardly sound. According to the latest data, the U.S. economy contracted at an annualized rate of 3.8% during the fourth quarter, marking the steepest drop in economic activity since 1982. The decline was less severe than the 5.5% drop that was expected, but that was largely due to an unexpected increase in inventories. Consumer spending, which accounts for roughly 70% of economic activity, remains weak as consumption expenditures dropped at a 3.5% annual rate.

Obama congratulates Iraq for peaceful polls

(RTTNews) - U.S. president Barack Obama congratulated Iraq for holding a largely peaceful vote for provincial councils across the country and called the elections an "important step forward".

Obama said the U.S. is "proud to have provided technical assistance, along with the United Nations and other international organizations, to Iraq's Independent High Electoral Commission, which performed professionally under difficult circumstances."

Voting in the provincial elections ended peacefully amid brisk turnout on Saturday evening. Preliminary results from the electoral commission are expected within five days, while the final numbers are due at the end of February.

Sunnis, who boycotted the January 2005 elections, turned out in force. More than 14,000 candidates were running for just 440 seats on 14 provincial councils. The first nationwide vote in four years is seen as a test of stability before a general election due later this year.

Anti-government rallies staged across Russia as economic woes intensify

(RTTNews) - Thousands of people held anti-government rallies across Russia to protest the government's economic course and its handling of the financial crisis

In Far East cities, including Vladivostok and Khabarovsk, several thousand people hit the streets waving banners with slogans like "The crisis is in the heads of the authorities, not in the economy." They demanded the resignation of Prime Minister Vladimir Putin's government over growing economic problems and accused authorities of suppressing dissent.

In Moscow, Russian police reportedly detained more than 40 people during one protest alone. Meanwhile, government supporters also held their rallies across the country.

Russia has been hit hard by the international economic crisis following year of economic boom amid record high oil prices. However, with the economy in deep trouble, ordinary Russians have been increasingly concerned about what the future might hold as unemployment and the prices of basic food and utilities have risen rapidly.

BOND REPORT: Treasurys Rally After GDP Shrinks Most Since 1982

By Deborah Levine

Treasurys advanced Friday, pushing yields lower, after the worst quarterly contraction in the U.S. economy since 1982 sent investors seeking the safety of government debt.

Yields on two-year notes (UST2YR), which move inversely to the price, fell 3 basis points to 0.93%. A basis point is 0.01%.

Ten-year note yields (UST10Y) declined 2 basis points to 2.84%.

The fourth quarter's 3.8% annualized decline in gross domestic product would have been worse except the government counts an unwanted buildup of goods in stores as growth, even if no one is buying it.

Economists surveyed by MarketWatch expected GDP to contract 5.5% in the three months ended in December.

"This is nothing to get excited about," said Kevin Flanagan, fixed-income strategist at Morgan Stanley Global Wealth Management. "This will serve as a drag in the first quarter. You can't dismiss the facts of where the economy is and that's going to cap rates."

The report's inflation measure excluding food and energy, closely watched by the Federal Reserve, rose 0.6% in the quarter.

LATIN AMERICAN MARKETS: CORRECT: Mexico, Brazil Stumble As U.S. Economic Picture Dims

By Carla Mozee

Four sessions of consecutive advances by Latin American equities came to an end Thursday as investors sifted through another round of poor economic data from the U.S. and took gains off the table.

Mexico's IPC fell 3% to 19,537.05, zapping its 2.7% rise on Wednesday.

Brazil's Bovespa fell 1.5% to 39,638.42, a day after a 3.9% surge.

On Wall Street, the Dow Jones Industrial Average (DJI) dropped 2.7% and the S& P 500 Index (SPX) fell 3.3%.

Regional stocks were hammered as their U.S. counterparts suffered from fresh layoff announcements. Coffee retailer Starbucks Corp. (SBUX) and Eastman Kodak Corp. (EK) were among the companies that said they will cut thousands of jobs in a bid to reduce costs to help offset the impact of the economic recession.