Stocks on Friday edged lower on Wall Street after data showing the US economy grew at its weakest pace in three years in the first quarter gave traders a reason to cash gains.
However, major indices closed up for this month, with the NASDAQ up for six consecutive months, the longest streak in nearly four years.
The US’ GDP grew 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 in inventories.
The economy grew at a 2.1 percent pace in the fourth quarter of last year.
“GDP was a little bit light and that may be the cause of some weakness today,” said Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas, Texas.
Citi Research’s gauge on US economic data surprises turned negative for the first time since November last year.
The soft growth data is bad news for the administration of US President Donald Trump after campaign promises to significantly boost growth and adds to concerns among some in the market that lower taxes, deregulation and increased government spending — the main reasons for a post-election rally — will be, at the least, delayed.
“We saw the rally fade quite a bit into the last part of the first quarter,” Bradshaw said. “I think you’re going to have to see some [legislation] within the next couple of months, otherwise the market will become disenchanted. So far it’s been all talk, no show.”
The Dow Jones Industrial Average on Friday fell 40.82 points, or 0.19 percent, to close at 20,940.51, the S&P 500 lost 4.57 points, or 0.19 percent, to 2,384.2 and the NASDAQ Composite dropped 1.33 points, or 0.02 percent, to 6,047.61.
For the week, the Dow rose 1.9 percent, the S&P gained 1.5 percent and the NASDAQ rose 2.3 percent.
This month, the Dow gained 1.3 percent, the S&P rose 0.9 percent and the NASDAQ jumped 2.3 percent.
The NASDAQ was on Friday buoyed by gains in Amazon.com Inc and Google’s parent Alphabet Inc.
Amazon rose as much as 3.4 percent to a life high of US$949.59, and ended up 0.7 percent at US$924.99, while Alphabet gained as much as 5 percent to a record of US$935.90 and closed up 3.7 percent at US$924.52 after their quarterly results beat estimates.
Combined earnings reports and expectations for S&P 500 companies show profits 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 have weighed on investors’ minds.
Intel Corp fell 3.4 percent to US$36.15 after the company reported lower-than-expected quarterly revenue.
Baidu Inc (百度) ended down 4.1 percent at US$180.23 after the Chinese Internet company forecast second-quarter revenue largely below estimates.
Declining issues outnumbered advancing ones on the New York Stock Exchange by a 1.59-to-1 ratio; on NASDAQ, a 1.76-to-1 ratio favored decliners.
The S&P 500 posted 39 new 52-week highs and six new lows; the NASDAQ Composite recorded 103 new highs and 44 new lows.
About 6.94 billion shares changed hands in US exchanges on Friday, above the 6.55 billion daily average over the past 20 sessions.
Gogoro Inc (睿能創意) yesterday launched its first electric bicycle, the Gogoro Eeyo 1, in Taiwan, after unveiling the bike in New York in late May and in France on Tuesday. The company said it would also introduce the series in other European countries such as Germany and the Netherlands. The “Eeyo project” is the fourth of Gogoro’s eight projects that concentrate on smart transportation, which includes Gogoro’s electric scooter, battery swap system and electric scooter sharing service, company founder and chief executive officer Horace Luke (陸學森) told a media briefing in Taipei. “There are various types of city commuters. We will not
With the US dollar expected to weaken in the next 12 months due to near-zero interest rates, investors should consider purchasing US corporate bonds, Standard Chartered Bank Taiwan Ltd (渣打台灣銀行) said on Thursday. The bank said that the US Federal Reserve since last month has been buying bonds issued by US companies to curb default rates. The US dollar is forecast to be weaker against the pound, the euro and the yen, as well as the Canadian dollar, the Swedish krona and the Swiss franc, as the greenback lacks high investment returns after the Fed in March slashed the benchmark interest rate
BAD RAP: The exchange said Tatung had seriously breached shareholders’ rights and failed to give a satisfactory explanation of its board election dispute Tatung Co (大同) shares yesterday plunged by the maximum daily limit of 10 percent to NT$18.90, the lowest in three months, after the Taiwan Stock Exchange (TWSE) on Tuesday evening changed the company’s classification to a full-delivery stock effective tomorrow. The TWSE’s move follows the company’s failure to give a clear and satisfactory explanation of why it deprived dozens of shareholders of their voting rights during a board election at the annual shareholders’ meeting on Tuesday morning. Under the exchange’s regulations, investors are not allowed to engage in margin trading of a full-delivery stock, TWSE spokeswoman Rebecca Chen (陳麗卿) told
SIZE MATTERS: Medium-sized hotels that do not have the support of parent groups are more vulnerable and are forced to take action, a REPro Knight Frank researcher said About 50 hotels across Taiwan are seeking to exit the market as they succumb to the bleak business outlook amid international travel restrictions imposed to combat the COVID-19 pandemic. Yomi Hotel (優美飯店) on Minsheng E Road, Sec 1, in Taipei is seeking to transfer ownership with an asking price of NT$950 million (US$32.15 million) and a pledge for a lease contract that guarantees a 3 percent return. The budget hotel, with room rates that start from NT$1,400 per night, maintains normal operations, but has been struggling since March, when the government placed restrictions on inbound and outbound travel. Occupancy rates for hotels in