Wall Street slips for second day on soft GDP, earnings
NEW YORK (Reuters) – US stocks edged lower for a second consecutive session on Friday as some underwhelming corporate earnings and gross domestic product data offset recent enthusiasm over policy actions by President Donald Trump.
US economic growth slowed more than expected in the fourth quarter, with GDP rising at a 1.9% annual rate, below the 2.2% rise expected by economists and the 3.5% growth pace logged in the third quarter.
Chevron fell 2.4% to $113.79 after its quarterly profit fell short of analysts’ expectations. The stock was the biggest drag on the S&P 500 and the Dow Jones Industrial Average indexes. The S&P energy index, down 0.9%, was the worst performing of the 11 major S&P sectors.
Starbucks curbed gains on the Nasdaq. Its shares dropped 4.0% to $56.12 after the world’s biggest coffee seller trimmed its full-year revenue forecast.
“The market has rallied on expectations of good things to happen in the future but as we are getting the data that is factual of what is going on, it is not as good as people are hoping,” said Andrew Slimmon, portfolio manager at Morgan Stanley Investment Management in Chicago. “Which tells you, this earnings recovery that is expected in 2017, a good chunk of it is already baked into the market.”
Even with some disappointing corporate results, fourth-quarter earnings are expected to show growth of 6.8%, which would mark the biggest increase in two years and second straight quarter of growth, according to Thomson Reuters data.
The Dow remained above 20,000 for the third straight day, after breaching the milestone for the first time on Wednesday as the post-election rally reignited.
For the week, the Dow rose 1.3%, the S&P 500 gained 1% and the Nasdaq advanced 1.9%.
The Dow Jones Industrial Average fell 7.13 points, or 0.04%, to 20,093.78, the S&P 500 lost 1.99 points, or 0.09%, to 2,294.69 and the Nasdaq Composite added 5.61 points, or 0.1%, to 5,660.78.
Microsoft rose 2.3% to $65.78, while Intel gained 1.1% to $37.98 after both reported quarterly results above Wall Street expectations.
However, Google parent Alphabet lost 1.4% to $845.03 after it posted fourth-quarter profit below analysts’ estimates.
Colgate-Palmolive slumped 5.2% to $64.68 after the personal products maker’s fourth-quarter revenue missed estimates.
On Friday, the Bank of Israel set its representative rate for the US dollar at NIS 3.7980, for the British pound at NIS 4.7636, for the Canadian dollar at NIS 2.8964, for the Australian dollar at NIS 2.8581, and for the South African rand at NIS 0.2820. The bank set the representative rate for the euro at NIS 4.0544 and for 100 yen at NIS 3.2981.