NEW YORK, Jan. 30 (UPI) -- U.S. markets dipped Friday after the Commerce Department said the economy shrank at an annual rate of 3.8 percent in the fourth quarter.
Economists had expected a drop of 5.5 percent.
In late-morning trading, the Dow Jones industrial average declined 120,35 points, or 1.48 percent to 8,028.66. The Standard & Poor's 500 fell 1.64 percent, 13.88 points, to 831.26. The Nasdaq composite index was off 23.98 points, 1.59 percent, to 1,483.86.
The benchmark 10-year U.S. Treasury bond rose 16/32 to yield 2.81 percent.
The dollar was mixed Friday. The euro fell to $1.2891, compared to Thursday's $1.2964. Against the Japanese yen, the dollar fell to 89.72 yen, up from Thursday's 89.89 yen.
In Tokyo, the Nikkei average lost 257.19 points to 7,994.05, down 3.12 percent.
Exxon Mobil net income hits $45.22 billion
IRVING, Texas, Jan. 30 (UPI) -- U.S. oil giant Exxon Mobil said annual net earnings rose 11 percent to $45.22 billion, despite a 33 percent drop in fourth quarter earnings to $7.82 billion.
The yearly profit was a record for a U.S. corporation, topping the $40.61 billion Exxon Mobil made a year ago.
In the fourth quarter, the energy company recorded per share earnings of $1.55, a drop of 27 percent, as oil prices fell sharply through the second half of the year. Production dropped 3 percent in the quarter, compared with the final quarter of 2007, even as it put a liquefied natural gas facility on line in Qatar during the quarter.
Earnings were hit by a $570 million charge related to damage and slower production caused by Hurricanes Gustav and Ike, the report said.
Exxon Mobil distributed $40.1 billion to shareholders in 2008, up 12 percent from 2007.
"Weaker crude oil prices, higher operating expenses, lower chemical volumes and the impact of the Gulf Coast hurricanes were partly offset by higher downstream margins," Chairman Rex Tillerson said in a statement.
Commerce Dept. says recession deepening
WASHINGTON, Jan. 30 (UPI) -- The U.S. Department of Commerce said the recession worsened in the fourth quarter with gross domestic product shrinking at an annual rate of minus 3.8 percent.
The economy's contraction was at annual rate of 0.5 percent in the third quarter, but the deteriorating fourth quarter figure was not as bad as economist predicted. The consensus forecast was for the economy to shrink 5.4 percent.
In the second quarter the economy grew 2.8 percent.
The fourth quarter estimate -- a preliminary figure -- included a drop of 3.5 percent in consumer spending with a 22.4 percent drop in expenditures for durable goods. Non-durable goods spending fell 7.1 percent, while spending for services rose 1.7 percent.
The price index for gross domestic purchases fell at an annual rate of 4.6 percent, compared with a 4.5 percent increase in the third quarter.
Core prices, excluding food and energy prices, rose 1.2 percent following a rise of 2.8 percent in the third quarter.
Christina Romer, chair of the Council of Economic Advisers, said an "aggressive, well-designed fiscal stimulus is critical to reversing this severe decline."
"Immediate action to support both the financial sector and overall demand is essential," she said.
Job cuts mount in U.S. economic downturn
WASHINGTON, Jan. 30 (UPI) -- A week that began with massive job cut announcements ended on the same sour note as U.S. employers adjust to the economic downturn.
On Monday, Caterpillar Inc. cut 20,000 employees, drugmakers Pfizer and Wyeth announced a merger that would eliminate 19,500 jobs, Home Depot said it would trim 7,000 positions and Nextel/Sprint 8,000.
The day ended with an estimated 75,000 jobs scheduled for termination.
Aerospace giant Boeing announced it would shed 5,500 jobs Wednesday.
Job cuts picked up again Thursday with Eastman Kodak in New York announcing a fifth of its workforce, about 4,500 jobs, would disappear. Fire engine and dump truck producer Oshkosh announced 1,000 layoffs, and Cessna in Kansas 4,000, The Washington Post reported Friday.
"Everybody, established corporations are pulling in the horns and trying to weather the storm," said John Ryding, chief economist at RDQ Economics in New York.
The U.S. Labor Department said the number of workers filing for unemployment benefits reached 4.8 million, the highest since it began tracking the figure in 1967.