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Markets & Stocks

Bulls sound off, part II?
Investors digest positive third-quarter GDP report after Dow hit best level since summer 2001.
December 22, 2004: 8:52 AM EST

NEW YORK (CNN/Money) - Investors will be awaiting more of the year-end rally Wednesday after the previous session's gains left the Dow industrials at a 3 1/2-year high and the latest gauge on third-quarter gross domestic product was slightly better than expected

U.S. stock futures rose, pointing to a flat to mixed start for Wall Street, after broad gains Tuesday brought the 30-share Dow Jones industrial average to its best close since June 2001.

The economy grew at a slightly stronger rate than thought in the third quarter because imports were not as hefty as first estimated, the government said Wednesday, though corporate profits weakened.

Gross domestic product (GDP), the measure of total goods and services production in the country, expanded at a 4 percent annual rate in the July-September quarter instead of 3.9 percent as previously reported, a relatively robust pace that implied steady and sustained growth.

The figure beat Wall Street economists' forecasts that third-quarter GDP growth would be unrevised at 3.9 percent and was a step up from the second quarter's 3.3 percent rate of GDP growth.

Shares of Microsoft (Research) lost 1 percent in Frankfurt trading after the company lost a court fight to delay the effects of an antitrust order in Europe.

Elsewhere, Fannie Mae (Research) CEO Franklin Raines stepped down under pressure late Tuesday, just days after the Securities and Exchange Commission said the mortgage giant must restate earnings back to 2001 due to accounting rules violations.

The mortgage financing firm had earlier said that if its accounting was found improper it might have to restate up to $9 billion in earnings. CFO Timothy Howard also resigned.

Oil fell in early trading ahead of a closely watched report due later Wednesday about U.S. inventories. U.S. crude for February delivery fell 26 cents to $45.50 a barrel in electronic trading, while Brent oil futures lost 35 cents to $42.02 a barrel in London.

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Bond prices also fell, pushing the yield on the 10-year Treasury to 4.19 percent from 4.16 percent late Tuesday. Bond prices and yields move in opposite directions.

The dollar gained on the euro but slipped against the yen in early trading.

In corporate news, aircraft maker Boeing (Research) announced an order for 30 firm deliveries and 20 options from Japan Airlines, a deal that should be worth about $4 billion.

The Wall Street Journal reported Wednesday that Procter & Gamble (Research) had withdrawn its application to offer a testosterone patch, called Intrinsa, designed to treat a form of female sexual dysfunction.

Earlier this month a panel of outside experts advised the Food and Drug Administration to reject the application, saying more safety studies were needed. Shares of the Dow component lost nearly 1 percent in European trading.  Top of page

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