Suitably Flip

Dow Done Tickling 12k

Yesterday, I noted that a downside surprise in today's Q4 GDP estimate could quickly extinguish the Dow's (rather implausible to begin with, given recent data) flirtation with 12,000.  I suggested that an overdue market correction could even be catalyzed if we saw an outright pullback from the prior quarter's 2.6%, rather than simply a failure to match analysts' expected acceleration (to 3.7%).

Happily for bulls, only the latter played out.  Growth did accelerate, but the jump was barely half what economists had forecast.

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.2 percent in the fourth quarter of 2010, (that is, from the third quarter to the fourth quarter), according to the "advance" estimate released by the Bureau of Economic Analysis.  In the third quarter, real GDP increased 2.6 percent.

While the news could've been worse, 12,000 did indeed disappear over the horizon, with the Dow on course for what would be its worst session in more than two months (down 140 to 11,850 at noon).

On the bright side, it might not be as ugly as next Friday.

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Dow Done Tickling 12k

Yesterday, I noted that a downside surprise in today's Q4 GDP estimate could quickly extinguish the Dow's (rather implausible to begin with, given recent data) flirtation with 12,000.  I suggested that an overdue market correction could even be catalyzed if we saw an outright pullback from the prior quarter's 2.6%, rather than simply a failure to match analysts' expected acceleration (to 3.7%).

Happily for bulls, only the latter played out.  Growth did accelerate, but the jump was barely half what economists had forecast.

Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- increased at an annual rate of 3.2 percent in the fourth quarter of 2010, (that is, from the third quarter to the fourth quarter), according to the "advance" estimate released by the Bureau of Economic Analysis.  In the third quarter, real GDP increased 2.6 percent.

While the news could've been worse, 12,000 did indeed disappear over the horizon, with the Dow on course for what would be its worst session in more than two months (down 140 to 11,850 at noon).

On the bright side, it might not be as ugly as next Friday.