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Economic anxiety
Better-than-expected GDP report raises concerns about higher interest rates, hitting stock futures.
November 30, 2005: 9:02 AM EST

NEW YORK (CNNMoney.com) - Stocks could trip over good news early Wednesday as investors worry that a strong economic report could again raise concerns of higher interest rates.

U.S. stock futures were down, indicating a lower opening for stocks, after the better-than-expected revision of the third-quarter gross domestic product.

GDP, a measure of all goods and services produced within U.S. borders, grew at a revised 4.3 percent annual rate in the July-to-September period, the fastest pace since the first three months of 2004, the Commerce Department said.

Economists surveyed by Briefing.com had forecast that the annual growth rate in the quarter would rise to 4 percent, up from the initial reading of a 3.8 percent gain.

At 2 p.m. ET, the Federal Reserve could give further clues on its interest rate plans when it releases its so-called Beige Book. The Chicago PMI report could also give an early look at manufacturing strength in the Midwest, with economists forecasting a slightly slower pace of growth.

Stocks are coming off a narrow decline Tuesday when stronger-than-expected readings on new home sales, durable goods orders and consumer confidence added to concerns about the Fed staying with its course of interest rate hikes into the new year. Treasuries also sold off on the news.

"The good news is that the economy is stronger than anyone thought and earnings are likely to be better. But it also means that the Fed is going to have to (raise interest rates) to at least 4.75 (percent)," said Mark Vitner, senior economist at Wachovia Securities. "Folks know the market rallies when the Fed signals it's done (raising rates), and they've been trying to guess when it was going to be done. These numbers suggest it's not done."

Oil prices were lower again early Wednesday ahead of the weekly U.S. fuel inventory report, due at 10:30 a.m. ET. The January light crude futures contract for NYMEX lost 86 cents to $56.50 a barrel in electronic trading, while the January contract for Brent crude lost 10 cents to $54.22.

Major markets in Asia closed mixed Wednesday, as Japan's Nikkei hit the 15,000 mark for the first time in five years before ending slightly lower. Major European markets were lower in early trading.

Treasury prices rebounded from Tuesday's selloff, cutting the yield on the 10-year note to 4.45 from 4.48 percent late Tuesday. The dollar lost ground against the euro and yen.

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