UPI NewsTrack Business

Dow slips on growth data

NEW YORK, July 30 (UPI) -- U.S. markets turned lower Friday morning after the Bureau of Economic Analysis said the gross domestic product rose just 2.4 percent in the second quarter.

Economists say the growth rate barely puts the U.S. economy on track to break even on employment with the unemployment rate at 9.5 percent.

The figure follows a 2.7 percent growth rate in the first quarter. At 2.4 percent, the figure was slightly below expectations.

In late morning trading, the Dow Jones industrial average lost 14.01 points, 0.13 percent, to 10,454.20. The Standard & Poor's 500 index lost 0.18 percent, 1.96, to 1,099.57. The Nasdaq composite index dropped 0.14 percent, 3.26, to 2,2,48.43.

The benchmark 10-year Treasury note rose 11/32 to yield 2.947 percent.

The euro fell to $1.2021 from Thursday's $1.3078. Against the yen, the dollar fell to 86.68 yen from Thursday's 86.84 yen.

In Japan, the Nikkei 225 index lost 1.64 percent, 158.72, to 9,537.30.

Economists say slow is the new normal

NEW YORK, July 30 (UPI) -- Some U.S. economists are concluding, for now, that the economic recovery is slow but perfectly normal considering its point of origin.

Harvard University economics Professor Kenneth Rogoff, a former International Monetary Fund chief economist, called the recovery "remarkably normal for a post-financial crisis recovery."

The recovery is slow, but "not necessarily a reason to panic," Rogoff said Friday in a New York Times report.

Bernard Baumohl, chief global economist at the Economic Outlook Group, said confidence would grow with "evidence that the European economies are able to withstand the debt crisis … banks are showing they have stronger capital and Chinese policymakers are successfully able to avoid any sharp downturn."

Even a lack of jobs is normal for a recovery, said Scott Davis, an equity analyst at Morgan Stanley. "Investors and board(s) of directors don't want to see them (companies) hire people until business is 100 percent back," he said.

"A lot of people are looking at things with the glass half empty. And they're temporarily on the sidelines," said Toll Brothers Chief Executive Officer Douglas Yearley.

Gross domestic product languishes

WASHINGTON, July 30 (UPI) -- The U.S. gross domestic product, a measure of total economic output, rose 2.4 percent in the second quarter, the Commerce Department said Friday.

The first second-quarter estimate out of three was 0.1 percentage points below expectations and 0.3 percentage points below first-quarter growth, which firmed at 2.7 percent.

In the fourth quarter of 2009, as businesses rebuilt inventory, the economy surged 5.6 percent. The new figure is a signal that inventory buildup has run its course. It is also discouraging in that economists estimate it takes 2.5 percent growth to break even on jobs, given the number of people of working age is growing.

The current unemployment rate is 9.5 percent.

In the second quarter, consumer spending increased 1.6 percent, a decline from the previous quarter when spending grew 1.9 percent. Private businesses continued an inventory buildup, adding $75.7 billion to inventories, compared to $44.1 billion in the first quarter.

Inventory growth is considered negative, however, if it represents a backlog of unsold goods. It is a positive when it represents an expectation of increasing sales.

Exports in the quarter rose 10.3 percent, a decline from the 11.4 percent surge in the first quarter. Imports, a negative factor, grew 28.8 percent, compared to 11.2 percent in the first three months of the year.

Disney to sell Miramax Films

LOS ANGELES, July 30 (UPI) -- Walt Disney Co. said it would part with its independent studio Miramax Films for about $660 million.

The agreement was reached with an investor group led by Ronald Tutor, chairman and chief executive officer of Tutor Perini Corp., a California construction firm, and Tom Barrack, CEO at Colony Capital, a private equity group.

The New York Times reported Friday the partnership, called Filmyard Holdings, put $40 million down toward the purchase, which is set up as non-refundable.

The deal is expected to close before the end of the year, provided it meets with regulatory approval.

"We are proud of Miramax's many accomplishments," Disney CEO Robert Iger said.

Disney, however, is set to "focus on the development of great motion pictures under the Disney, Pixar and Marvel brands," he said.

Miramax includes a portfolio of about 700 movies, including academy award winner "Chicago," the Times said.