Stocks Finish Mixed

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In economic news Tuesday, preliminary U.S. third-quarter gross domestic product GDP was revised lower to a -0.5% growth rate, from -0.3% previously, as expected. Real consumption spending was knocked down to a -3.7% pace, from -3.1%, with a downward revision to durable goods spending. Fixed investment was unrevised at a -5.6% pace, though residential construction spending was revised up to -17.6% from -19.1%; both equipment and software, and spending on structures were revised down.

Real net exports contributed positively to GDP growth but at a slower 1.07% pace (revised from 1.13% previously), though inventories contributed more at a 0.89% rate from 0.56% previously. Government spending also added less to Q3 growth than initially reported, posting a 5.4% pace from 5.8% previously. The GDP chain price index was steady at 4.2%, while the core rate slowed to 2.6% from 2.9%.

The U.S. S&P/Case-Shiller home price index fell 1.85% in September to 161.56 from a revised 164.60 in August (164.57 previously) for the 20-city composite. All 20 cities in the index posted declines, paced by San Francisco, Phoenix, Las Vegas, and Miami. On a year-over-year basis, home prices are down 17.44% from -16.6% previously reported.

U.S. consumer confidence improved to 44.9 in November, above the record low of 38.8 in October and the 39 expected by markets. However, it is well below the 95.2 reading seen a year ago. Expectations rose to 46.7 from 35.7. However, present situations slipped to 42.2 from 43.5 on continued job fears, with those saying jobs are "hard to get" is 37.2, up from 36.6% in the prior month. The 12-month inflation index fell to 5.9% from 6.8%.

"The data are a bit better than expected, [but] job concerns still weigh on household moods to reflect soft spending ahead," says S&P senior economist Beth Ann Bovino.

The International Council of Shopping Centers and Goldman Sachs weekly sales index fell 0.9% in the week ended Nov. 22 after rising 0.3% the week before. Sales declined 0.8% on a year on year basis after falling 0.1% the week before.

Reuters reports the World Bank forecast the Chinese economy will grow next year at 7.2%, the slowest pace since 1990, as the impact of global financial turmoil intensifies and the real estate sector remains in the doldrums. The World Bank in June had forecast 2009 gross domestic product growth of 9.2%. It already expects growth this year to moderate to 9.4%, the first single-digit pace of expansion since 2002, from a breakneck 11.9% in 2007. Louis Kuijs, the senior economist in the bank's Beijing office, said one silver lining was that inflation had disappeared from the radar as demand softened and raw material prices tumbled. The bank expects consumer prices to rise just 2.0% next year after a 6.5% increase in 2008.

The bank is much gloomier than its sister organization, the International Monetary Fund, which on Monday forecast 8.5% growth for China next year.