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Market Update Analysis: 
Economic Slowdown Powers Rally
Author: Elena Todorova
123jump.com
Last Update: 10:17 AM EDT July 28 2006


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Stocks rallied at opening, following second-quarter GDP data release. The Commerce Department said GDP growth slowed to a 2.5% annual rate from 5.6% in the first quarter, feeding hopes that the Federal Reserve may not continue raising interest rates further. The GDP report said core consumer prices surged 2.9%, while the department''s employment cost index rose a stronger-than-forecast 0.9%.

 
European stocks pulled back at mid-day trading Friday, dragged by surging oil prices and concerns about U.S. economy. Strong crude oil prices of $74.72 a barrel hurt airline companies like Lufthansa and British Airways. Resource stocks like Rio Tinto and Anglo American also moved to the downside. Among European movers German supermarket chain Metro gained d 2.3% after it agreed to buy the German operations of Wal-Mart Stores Inc. U.K. insurance company Prudential dropped 2.9% due to a first-half loss for its internet banking operation, Egg. The German DAX 30 lost 0.2%, followed by the French CAC 40 and London FTSE 100 which also fell 0.2%.
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