U.S. stocks skid to close
NEW YORK, Jan. 30 (UPI) -- U.S. stock indexes slid to the close Wednesday after the government said the economy shrank in the fourth quarter of 2012.
The advance figure released by the Commerce Department, which is subject to two revisions in the next two months, pegged the gross domestic product at minus 0.1 percent October through December.
The contraction was a surprise. Economists had predicted GDP growth of 1.1 percent.
Balancing out the dour report, Automatic Data Processing Inc. said the economy added 192,000 private sector jobs in January, which beat expectations.
Early attempts to gain momentum collapsed. The Dow Jones industrial average was off 44 points at the close, off 0.32 percent, to 13,910.42. The Nasdaq composite of tech-oriented stocks lost 11.35 points, or 0.036 percent, to 3,142.31. The Standard and Poor's 500 index lost 5.88 points, or 0.39 percent, to 1,501.96.
On the New York Stock Exchange, 1,025 stocks advanced and 1,996 declined on a volume of 3.6 billion shares traded.
The 10-year treasury note rose 3/32 to yield 1.992 percent.
Against the dollar, the euro rose to $1.3566 from Tuesday's $1.3492. The dollar rose to 91.08 yen from Tuesday's 90.73 yen.
In Tokyo, the Nikkei 225 index added 2.28 percent, 247.23 points, to 11,113.95.
In London, the FTSE 100 index dropped 0.25 percent, 16.08 points, to 6,323.11.
Fed keeps monetary policy intact
WASHINGTON, Jan. 30 (UPI) -- The U.S. Federal Reserve said it would continue asset purchase at the rate of $85 billion per month and hold steady with its historically low interest rates.
Consistent with its message in December, the central bank said it would maintain its federal funds rate, the overnight bank-to-bank lending rate, at zero to 0.25 percent until the unemployment rate falls to 6.5 percent or below, while keeping an eye on its target inflation rate of 2 percent or lower.
Over-stimulating the economy can drive prices higher, a problem the policy makers want to avoid, especially with high unemployment.
The current unemployment rate is 7.8 percent. Inflation for 2012 came in at an annual rate of 1.7 percent, but the Commerce Department said Wednesday the gross domestic product shrank 0.1 percent in the fourth quarter.
For the year, the GDP came in a 2.2 percent, which economists say is not high enough to sustain job growth at a pace that will bring down the unemployment rate.
The Fed said economic growth "paused in recent months, in a large part because of weather-related disruptions and other transitory factors."
The weather-related speed bump was Hurricane Sandy, which derailed job growth temporarily.
RIM launches new name and BlackBerry 10
TORONTO, Jan. 30 (UPI) -- Canadian smartphone pioneer Research In Motion said it was changing its name as it launched its new BlackBerry 10 smartphone Wednesday.
RIM, as it was sometimes called, produced the first wildly popular cell phone, called the BlackBerry, which has struggled to get out from under a wave of rivals that followed, most notably Apple with its iconic iPhone and a host of phones that use Google's Android operating system.
The Canadian company Wednesday said it would adopt the name of its most familiar product. The firm said it would operate under the name BlackBerry, "effective immediately."
"This change from Research In Motion to BlackBerry comes at a defining moment in our company's history. RIM created the first BlackBerry smartphone and changed the way millions of people around the world stay connected. We have used that same ingenuity and innovation to redefine mobile computing with BlackBerry 10. As we launch BlackBerry 10 around the world, now is the right time to adopt the iconic BlackBerry name." said Thorsten Heins, the company's president and chief executive officer in a statement.
The name change includes a switch of the company's stock market symbols It will trade as "BB" on the Toronto Stock Exchange and "BBRY" on the NASDAQ index.
Student loan delinquency rate rising
WASHINGTON, Jan. 30 (UPI) -- U.S. credit research firm FICO said that student loan delinquencies were climbing fast due to higher debt, slow wage growth and a shortage of jobs.
In a set up that sounds like a perfect storm owing to the three deteriorating factors, FICO said delinquent student loans reached 12.4 percent for loans that originated from 2005 through 2007.
In a subsequent two-year stretch with loans originating in 2010 through 2012, the delinquency rate is expected to reach 15.1 percent, a 22 percent increase, FICO said.
The primary cause of new delinquencies, FICO said, is significantly higher debt. Student loan debt averaged $17,233 in 2005, a figure that jumped 58 percent in seven years to $27,253 in 2012.
On average over the same seven years, revolving debt and car loan debt decreased, FICO said.
With the economy recovering slowly and job growth also slow, "This situation is simply unsustainable and we're already suffering the consequences," said Dr. Andrew Jennings, FICO's chief analytics officer and head of FICO Labs in a statement.
"When wage growth is slow and jobs are not as plentiful as they once were, it is impossible for individuals to continue taking out ever-larger student loans without greatly increasing the risk of default. There is no way around that harsh reality," Jennings said.