Dow Hits 5-Year High, Boeing and Facebook Report; Make-Or-Break Blackberry

Matt Nesto analyzes the morning business headlines.
8:09 | 01/30/13

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Transcript for Dow Hits 5-Year High, Boeing and Facebook Report; Make-Or-Break Blackberry
Your latest in business and finance from ABC news now. You're watching live coverage of the opening bell on ABC news now and bringing about this morning -- are refining. The refinery and Sugar Land, Texas executive -- doing the honors taking a break from oilfields and now. Kicking up -- for today Wednesday January 30. Everyone I'm down Cutler in New York some breaking news this Wednesday morning. Some numbers out in the past hour showing the economy and sacked shrinking now here to discuss the bombshell plus several other stories FaceBook earnings a do or die update for Blackberry manifesto. -- -- break out on our partner Yahoo! finance Matt good to see this Wednesday morning. I GDP down during the fourth quarter of last year the Commerce Department says it shrank a tenth of a percent. How big of a concern is this given the previous records of quarters. Well it certainly is that it certainly is a shocking number it's gonna start a lot of conversations the market is taking the news very well that's because it's gonna galvanized. Any efforts. To make sure that we don't do anything to screw this thing up we've seen a lot of people coming out lately in talking about austerity -- working. Talking about the effect of taxes doing everything in our power to make sure that we keep the government functioning and spending. Because we don't want to send ourselves into recession then we get this little baby. -- over the transom and that that's gonna get some people looking it is the first negative quarter that we've had three and a half years economists completely look like -- on this one and the truth of the matter is nobody saw it coming in he would tear apart the number though Dan the number itself. Isn't as bad as the headline. Might. -- lead you to believe and that's because the inventory contraction and the government spending contraction -- real reason why we went negative if you look at personal consumption. It was. Quite higher was one and a half percent higher so that was a quarter on quarter improvement but again the headline number very negative it will be seen and acted upon accordingly down in Washington. Matt I have to I hate to put you on the spot but I have to ask you -- we -- well I -- -- exact you know you're bracing for this one. But are we crying wolf with -- possible recession. Well yes we do -- -- two quarters -- bit of negative GDP. Then we get into. A -- recession. Tenth of a percent decline could easily. You get to revise the way this is the first print for the fourth quarter number -- it was very close we saw a huge uptick in third quarter inventories. And I actually wrote a piece at the time. That said dead GDP just rose it was three point 1% you might remember. But GDP just went up for all the wrong reasons so inventories went up which is assigned typically. It can be either sign of confidence that manufacturers and businesses are building up their mentors -- can be -- sign that they're not moving enough stuff. Out the door and that the -- -- -- building so we saw big. Inventory decline sort of a balancing out but it is a big drop from quarter -- quarter from 3% to a negative trend. Are also lets you look at the people are really quick just to see how the markets are digesting these early moments of trading there because ADP payroll came out with their numbers this morning. Saying that there were a 190000. Private sector jobs -- for the month of January. And as we can see the Dow is trading down just slightly bare ground but eighteen points but it -- -- -- though at a five year high. Out what's -- the fuel behind that rally. But a lot of this has been a lot of confidence in and cyclicals you know we have a lot of pressure on the market with the whole fiscal cliff which was. Basically resolved over handshake and a -- given nine we did see everyone's taxes go up at setter but there's been so -- been so much. -- pressure about fiscal cliff fiscal -- -- -- Expectations for earnings are -- rock bottom we've seen some. Companies. Come in with some very good numbers on -- relative basis relative to expectations. And so we've seen stocks go higher here today there's a belief that China is turning around so we're seeing more. People not willing to take more risk and places like that we're seeing. The belief that possibly the worst is over in Europe so we're seeing investors start to take a look at that part of the world as well in the -- it all together. And the multinational. Trade. Of growth is back on and that's pushing those sorts of stocks higher. Earnings seasons in full swing and Boeing coming out of their numbers this morning you know the companies -- -- -- -- -- that dreamliner 787. Grounded. Because of problems electrical fires smoke things like that. First of what are we see for the numbers and secondly what do we know about what the company -- about some of these potential battery problem. It's. Well you know the -- results are in other sort of frozen in time -- -- results they don't really reflects what the company is dealing with now the stock is so one of only two stocks in the -- that's actually down year to date and given. The severity and the potential for rat. That this problem has the stock is actually held up very well it's only off 5% from its 52 week. Hi so in that was hit on the beginning of the year. And even when this these problems first started to durable out -- early December the shares are actually about flat may be slightly higher since that period of time so. The investing. -- old is slow to turn their back on Boeing and thinks that they can still correct this problem that it's not systemic. That it is something that they can containing correct -- continue to chip away at that. Multi hundred unit backlog of -- certainly not good news is certainly not how they wanna start a new flight but some. Engineers. Tell me that it's not uncommon for new planes to have. You know there -- so complex these systems to have little problems like this but you know. That's an engineer. Ryan remnants Valencia now that that's true dwelling on that -- was response to revolutionize the industry and and I think maybe that was a lot of the the excitement in the headlines are coming out of that on our FaceBook -- about their earnings this afternoon after the -- rings for bird hitting the trading day we get into looking for and that report. Well I'll be looking for whether -- -- the stock is worth -- it's up about what 7580%. Since the low is. And you know they're looking earned fifteen cents a share on one point five billion dollars. In revenue so is it worth it they have to not just meet those expectations they have to crush them did sort of justify the move that the stock has made we'll hear more talk about their new -- search function. We'll talk more about. How they're trying to diversify their revenue base how -- getting -- mobile business going but ultimately. As a maturing. In. Public company this is only their third quarterly report since going public it's hard to believe -- only nine months old. In now our universe. We need to hear just more management -- -- were on the job and we're grow in this thing we want to see their user base their daily active user base. Going higher as well especially in the -- Area in just a couple of seconds left that we have -- Research in Motion coming out with their Blackberry ten today's as the make great product for this company Emmys is where they're they're -- and everything on this. You've heard the term Blackberry she games so -- -- It's out there and you know they need to compete and they need to come up with something big here they have a very loyal installed. Subscriber base that loves the Blackberry and they're sticking with that and those people I -- an analyst on this week -- that if just 13. Of their existing user base. Rolls over into the new product they will just crush earnings he loves the stock. The stock's been doing well but the market's very skeptical and nervous about the balance that we've seen in round. Long live the Blackberry -- one last look at the data over the government today down about four points at thirteen 1952. Met -- from Yahoo! finance Matt have a great Wednesday. -- --

This transcript has been automatically generated and may not be 100% accurate.

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