Stocks struggled Friday to shake off the effects of revised government reports suggesting more modest economic growth than previously believed as well as higher inflation.
When the final trading bell rang, the Dow was down 72 points, or 0.7%, to 10372, while the S&P 500 slipped 6.3 points, or 0.6%, to 1134. The tech-heavy Nasdaq, meanwhile, never fell into red territory and finished on an upswing at 2025, a gain of 10 points, 0.5%.
Before trading began, the U.S. Commerce Department announced a downward revision of the first quarter’s Gross Domestic Product to 3.9% from previous estimates of 4.4%. Perhaps more significantly to investors, the revised figure indicates a clear economic slowdown since last fall — Q3’s GDP was 8.2%, followed by 4.1% in Q4 and now 3.9% for this year’s first quarter.
In addition, the Personal Consumption Expenditure (PCE) price index — a measure of inflation — climbed at a 3.2% annualized rate in Q1, above the previously estimated 3.0%.
In other economic news Friday, the National Association of Realtors reported that sales of existing homes rose 2.6% in May, beating estimates and setting a new record. But an economist for the realtors’ association said rising interest rates and more expensive homes probably mean that May’s pace represents a peak.
Among tech stocks, Oracle
gained 30 cents, or 2.6%, to $11.80 in heavy trading. The database software maker filed a motion in a San Francisco court Thursday to dismiss a government lawsuit seeking to prevent its attempted hostile takeover of PeopleSoft, after the government rested its case. The judge denied the request, and Oracle said it would shorten its list of witnesses in its defense.
Online auction giant eBay
set a new closing high on Friday, finishing at $90.72, a gain of $1.98, or 2.2%, beating its previous mark of $90.20. Shares climbed as high as $91.52 in Friday’s session. At its annual stockholders meeting Thursday, shareholders rejected a proposal that the company expense the cost of stock options in its annual income report.
Computer software market leader Microsoft
gained 18 cents, or 0.6%, to $28.57 as it prepares for its own anti-trust case, this one thousands of miles away in Brussels. Microsoft said Thursday it would file to suspend the anti-trust action being brought against it by the European Union.
fell 17 cents, or 0.6%, to $27.78 after announcing that a “limited” number of its new Grantsdale chipset were defective. The company said that almost none of the faulty chipsets had reached consumers.
Content management software provider Verity
climbed 25 cents, or 2.0% to $13.01 after announcing Thursday financial results for its fourth quarter that exceeded previous management expectations. But the company also warned that revenues for the current quarter would fall short of Q4 sales numbers.