Markets were heading lower after news was released that the U.S. economy sank further than previously expected during the first-quarter. The Commerce Department announced that gross domestic product dropped at an annual rate of 2.9%, which marks the worst performance on record in five years. Last month, it was reported that the economy only fell 1.0% during the first-quarter. Some have been placing the blame for the large drop on the harsh winter weather. The Commerce Department said that the gap between the second and third estimates for GDP was the largest one record since 1976. Stuart Hoffman, chief economist at PNC Financial, said ?We have ample evidence that the first quarter was just a temporary setback for the economy, and we are climbing out of the hold in the current quarter.?
Shares of Lockheed Martin Corporation (LMT) were on the rise after the company won a $1.9 billion deal with the U.S. Air Force. The contract was awarded to Lockheed to build two missile-warning satellites for the Space-Based Infrared System. This will be the fifth and sixth satellites for SBIRS. The $1.9 billion deal saved the U.S. Air Force nearly $1 billion from a block-buy contracting. Colonel Mike Guetlein, production program manager, said, ?We eliminated unnecessary layers of program oversight and contract reporting, restructured our test program and streamlined the production schedules.?
In a separate report released by the Commerce Department, orders for goods drop in May. Orders for long-lasting manufactured goods fell an unexpected 1% last month. Demand declined on everything from transportation, machinery, computers and electronic products. Durable goods orders, which include items from toasters to aircrafts, were upwardly revised in April by 0.8%. The boost was partially attributed to orders for defense equipment. Economists were expecting orders to stay flat last month.
That?s all for today,
Warren Gates, Oakshire Financial
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