US stocks sag on weak GDP reading
28/04/2005 - 23:00:29Stocks sagged today as the latest reading of gross domestic product growth came in below expectations, raising yet more questions about the strength of the economy despite robust earnings and higher forecasts from Procter & Gamble Co., among others.
With more than 50 companies in the Standard & Poor’s 500 reporting results, it was one of the busiest days of the earnings season.
But investors were distracted from mostly positive corporate news by the disappointing GDP report, which aggravated inflation worries and renewed concern that Federal Reserve policy makers would take a more aggressive posture on rates when they meet next week.
“I think the GDP numbers have kept inflation on the front burner and that’s obviously weighing on the day’s action,” said Bryan Piskorowski, market analyst at Wachovia Securities.
“But bonds are not reacting super badly to these numbers. We’re at a pivotal point right now. What the bond market is trying to do is determine at what point do we see light at end of the tunnel with regard to the Fed? So we’re taking some solace in that.”
According to preliminary results, the Dow fell 128.43, or 1.26%, to 10,070.37.
The broader gauges also fell. The S&P 500 index was down 13.16, or 1.14%, at 1,143.22.
The Nasdaq composite index declined 26.25, or 1.36%, to 1,904.18, a fresh low for the year.
Treasury prices rallied, with the yield on the 10-year note slipping to 4.15%, from 4.23% late on Wednesday.
The US dollar was mixed against other major currencies; gold prices fell.
Crude futures, down for most of the day, rebounded to settle 16 cents higher at US$51.77 (€40.13) on the New York Mercantile Exchange.
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