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Market Update

U.S. Economic Growth Slows, Amazon Returns to Profit

Author: Nichole Harper
Last Update: 1:51 PM ET January 30 2015

1:50 PM New York – U.S. economic growth in fourth quarter was 2.6% and for all of 2014 was 2.4%. Stocks on Wall Street traded lower after slower than expected growth in the quarter. Russian ruble plunged 4% after central bank abruptly lowered rate by 200 basis points.

Market indexes in New York traded lower after the fourth quarter economic growth was lower than expected and Russia abruptly increased interest rate.

Market indexes opened higher and quickly descended down 1% after gross domestic product was weaker than expected in the fourth quarter. Investors also digested earnings from Amazon, Google, MasterCard and others.

On Wall Street trading, Tollbooth Strategy Index fell 0.1% or 11.30 to 10,013.98.

S&P 500 index slipped 18.25 or 0.9% to 2,002.38 and the Nasdaq Composite Index dropped 25.44 or 0.5% to 4,657.97.

Gross domestic product increased at 2.6% annual rate in the fourth-quarter, slower than 5% increase in the third-quarter, Department of Commerce reported today.

For the year 2014, the U.S. economy expanded at 2.4% rate, slightly above the 2.2% rate in 2013.

Consumer spending was the driver of the economic growth in the fourth quarter, expanding at 4.3% and the fastest pace since 2006.

Russian Ruble Plunges 4%

Russian ruble took another hit and closed down 2% to 70.15 against one dollar and fell 2.4% to 79.55 per euro. The currency recovered from the loss of as much as 4.3%.

Russian government bond due January 2028 increased for the third day in a row sending the yield lower by 31 basis points to 13.39%.

Central bank governor Elvira Nabiullina appears to have come under pressure from the government and banking community after rates were raised sharply in mid-December to arrest rising capital flight.

The Bank of Russia noted in a statement that the recent surge in inflation to 11.4% in December is expected to slow in a year.

“Cutting the by two percentage points will provide an opportunity to restart lending to real economy,” Nabiullina said in a statement.

U.S. Movers

Amazon.com, Inc (AMZN) climbed 11.2% or $34.99 to $346.74 after the online market place operator reported net sales in the fourth-quarter ending in December jumped 15% to $29.33 billion a year ago period.

Net income in the quarter declined 10.5% to $214 million or 45 cents a diluted share compared to $239 billion or 51 cents from the same quarter last year.

Amazon forecasted net sales in the first-quarter between $20.9 billion and $22.9 billion or an increase in the range of 6% to 16%.

Amazon had reported losses in the previous two quarters and for all of 2014 the company reported a loss.

Google Inc (GOOG) climbed 3.6% or $18.09 to $528.75 after the search engine service provider reported total revenues in the fourth-quarter ending in December climbed 15% to $18.1 billion a year ago period.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc