Stocks Smacked On GDP Report
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Stocks fell Friday on news that the economy grew more slowly than expected in the second quarter and inflation picked up.
Second-quarter GDP clocked in at 3.4% in the second quarter just below estimates while inflation ticked up to 3.2% from 2.9% in the first quarter, a sign that the Federal Reserve will likely continue to raise interest rates. Still, falling inventories and strong sales raised hopes for a strong second half.
Investment in equipment and software accelerated to an 11% growth rate from an 8.3% rate in the first quarter. Final sales of computers added 0.43% to GDP in the quarter, up from 0.37% in the first.
On the downside, the U.S. Commerce Department revised 2002-2004 growth estimates downward to 2.8% from 3.1%, largely on a downward revision in equipment and software investment, making the recovery the weakest of the post-World War II period. Still, equipment and software spending has been generally strong since the third quarter of 2003, in double digits for all but two quarters since then.
The Nasdaq lost 13 to 2184, the S&P fell 9 to 1234, and the Dow lost 64 to 10,640. Volume declined to 1.8 billion shares on the NYSE, and 1.61 billion on the Nasdaq. Decliners led 19-13 on the NYSE, and 16-14 on the Nasdaq. Downside volume was 67% on the NYSE, and 67% on the Nasdaq. New highs-new lows were 344-20 on the NYSE, and 226-17 on the Nasdaq.
rose 6% after beating estimates, while Symantec
fell 8% after missing revenue estimates.
, Ingram Micro
surged on their results.
, International Rectifier
fell on their results.