Sun, Apr 30, 2017 - Page 14 News List

Wall Street posts monthly increase

‘ALL TALK, NO SHOW’:Investors will need to see some new legislation in the US, or the market will become disenchanted, a Hodges Capital portfolio manager said

Reuters, NEW YORK

A trader works on the floor of the New York Stock Exchange on Friday.

Photo: Bloomberg

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.

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