By Tanya Agrawal
U.S. stocks were slightly lower in early afternoon trading on Friday after data showed the economy grew at its weakest pace in three years in the first quarter.Gross domestic product increased at a 0.7 percent annual rate, below the 1.2 percent rise estimated by economists, as consumer spending barely increased and businesses invested less on inventories. The economy grew at a pace of 2.1 percent in the fourth quarter.Other data showed that the University of Michigan's final April consumer sentiment index was at 97, below analysts' expectations of 98."The U.S. consumer spending is the most sensitive part of the economy and the GDP data has shown a very disappointing number," said Naeem Aslam, chief market analyst at Think Markets UK in London."We do anticipate that it is about time that we will see some reality check here."The Nasdaq Composite opened at a record high, propelled by gains in Amazon.com and Google-parent Alphabet, and is on track to post gains for the sixth straight month.
Amazon rose as much as 3.4 percent to a life high of $949.59, while Alphabet gained as much as 4.9 percent to a record of $935.90 after their quarterly results beat estimates.The S&P 500 and the Dow are also set to end the month in the positive territory as the corporate earnings season continues to impress. Overall profits of S&P 500 companies are estimated to have risen 13.6 percent in the first quarter, the most since 2011, according to Thomson Reuters I/B/E/S.While strong earnings have kept the market at or near record levels, persistent geopolitical tensions surrounding North Korea and doubts whether the Trump administration will be able to pass its tax and healthcare plans in Congress have weighed on investors' minds.
President Donald Trump told Reuters in an interview on Thursday that a "major, major conflict" with North Korea was possible over its nuclear and ballistic missile programs.At 12:42 p.m. ET (1642 GMT) the Dow Jones Industrial Average was down 29.18 points, or 0.14 percent, at 20,952.15, the S&P 500 was down 3.59 points, or 0.15 percent, at 2,385.18.The Nasdaq Composite was up 0.15 points, or 0 percent, at 6,049.09.
Nine of the 11 major S&P 500 sectors were lower, with the telecommunications index's 0.91 percent fall leading the decliners.Intel fell 3.4 percent to $36.17 after the company reported lower-than-expected quarterly revenue. The stock was the biggest drag on the three indexes.Baidu was down 5.2 percent at $178.21 after the Chinese internet company forecast second-quarter revenue largely below estimates. The stock was the second-biggest drag on the Nasdaq.Declining issues outnumbered advancers on the NYSE by 1,774 to 1,051. On the Nasdaq, 1,882 issues fell and 858 advanced.The S&P 500 index showed 35 new 52-week highs and five new lows, while the Nasdaq recorded 85 new highs and 32 new lows. (Reporting by Tanya Agrawal; Editing by Anil D'Silva)
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Updated Date: Apr 28, 2017 23:15 PM