Equities slip after weak U.S. GDP; euro strengthens
By Chuck Mikolajczak
NEW YORK (Reuters) - World stock markets dipped on Friday, as U.S. equities retreated after a soft reading on first-quarter economic growth, while the euro strengthened as euro zone inflation rose to hit the European Central Bank's target.
The U.S. economy grew at a 0.7 percent annual rate in the first quarter, its weakest pace in three years, amid tepid consumer spending and as businesses invested less on inventories, in a potential setback to President Donald Trump's promise to boost growth.
The lackluster number sent equity indexes on Wall Street slightly lower, although strong earnings from Google parent Alphabet (GOOGL.O: Quote), which closed up 3.7 percent, and Amazon (AMZN.O: Quote), which rose 0.7 percent, curbed losses on the benchmark S&P index and briefly pushed the Nasdaq to a record.
"We know from history now that first-quarter (GDP) is usually a little fuzzy, it’s usually off and it usually gets upside revised," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.
"But you’ve also got great earnings. I can’t get over how strong earnings reports have been - there is enough of a cushion there that even if it comes down a little we are going to be in good shape.
First-quarter earnings are currently expected to grow 13.6 percent, according to Thomson Reuters data, the best performance since 2011.
The Dow Jones Industrial Average .DJI fell 40.82 points, or 0.19 percent, to 20,940.51, the S&P 500 .SPX lost 4.57 points, or 0.19 percent, to 2,384.2 and the Nasdaq Composite .IXIC dipped 1.33 points, or 0.02 percent, to 6,047.61.
The Dow had its best week since early December while the Nasdaq saw a sixth-month winning streak, its longest since 2013. Continued...