Not much went right for U.S. stocks on Thursday, but the surprise was that only blue chip stocks felt the pain.
A weaker than expected GDP report and a spike in weekly jobless claims to the highest level since April 2003 had blue chip stocks on the defensive all day, but the Nasdaq was in positive territory for most of the day before closing slightly lower, thanks to Bristol-Myers’ (NYSE: BMY) bid for Imclone (NASDAQ: IMCL) and some strong technology earnings reports.
But the economic data could have longer-term implications for the market and the economy. The U.S. Commerce Department reported that the economy grew at a 1.9% rate in the second quarter, lower than expected, while a revision of fourth-quarter data to -0.2% suggested that a recession may have begun late last year. Equipment and software investment declined 3.4% in the second quarter, and economists don’t expect much of a rebound in the second half.
The spike in jobless claims dashed hopes that the government’s monthly non-farm payrolls report on Friday will be better than the expected loss of 75,000 jobs, and investors will also have to contend with auto sales, GM’s (NYSE: GM) earnings, and manufacturing and construction data.
But for a day at least, tech investors were looking on the bright side.
Better than expected results from Motorola (NYSE: MOT), Symantec (NASDAQ: SYMC) and Cablevision (NYSE: CVC) sent their stocks surging, while Dell (NASDAQ: DELL) rose 2.4% on a Cowen & Co. upgrade. Dell will report its quarterly results on Aug. 28.
Form Factor (NASDAQ: FORM) gained 6% after beating estimates, but Akamai (NASDAQ: AKAM), Mercury Computer (NASDAQ: MRCY), Harris Stratex (NASDAQ: HSTX) and Stratasys (NASDAQ: SSYS) were earnings casualties.
Yahoo (NASDAQ: YHOO) slipped ahead of its now anticlimactic shareholder meeting on Friday.
The Nasdaq slipped 4 to 2325, the S&P tumbled 17 to 1267, and the Dow plunged 205 to 11,378. Volume declined to 5.38 billion shares on the NYSE, and rose to 2.4 billion on the Nasdaq. Decliners led by a 20-13 margin on the NYSE, and 15-13 on the Nasdaq. Downside volume was 65% on the NYSE, and 58% on the Nasdaq. New highs-new lows were 41-113 on the NYSE, and 62-112 on the Nasdaq.