Wall St. slips on GDP data

But stock indexes rise in April

NEW YORK (Reuters) – Stocks edged lower on Wall Street on Friday after data showing the US economy grew at its weakest pace in three years in the first quarter gave traders a reason to cash in recent gains.

Major indexes closed up for April, however, with the Nasdaq up for six consecutive months, the longest streak in nearly four years.

Gross domestic product grew at a 0.7% annual rate, below the 1.2% rise estimated by economists, as consumer spending barely increased and businesses invested less in inventories. The economy grew at a 2.1% pace in the fourth quarter.

“GDP was a little bit light and that may be the cause of some weakness today,” said Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas.

Citi Research’s gauge on US economic data surprises turned negative for the first time since November.

The soft growth data is bad news for the Trump administration after campaign promises to significantly boost growth and adds to concerns among some in the market that lower taxes, deregulation and increased government spending the main reasons for a post-election rally – will be, at the least, delayed.

“We saw the rally fade quite a bit into the last part of the first quarter,” said Bradshaw. “I think you’re going to have to see some [legislation] within the next couple of months, otherwise the market will become disenchanted. So far it’s been all talk, no show.”

The Dow Jones Industrial Average fell 40.82 points, or 0.19%, to close at 20,940.51, the S&P 500 lost 4.57 points, or 0.19%, to 2,384.2 and the Nasdaq Composite dropped 1.33 points, or 0.02%, to 6,047.61.

For the week, the Dow rose 1.9%, the S&P gained 1.5% and the Nasdaq rose 2.3%. During April, the Dow gained 1.3%, the S&P rose 0.9% and the Nasdaq jumped 2.3%.

The Nasdaq was buoyed Friday by gains in Amazon and Google’s parent Alphabet.

Amazon rose as much as 3.4% to a life high of $949.59, and ended up 0.7% at $924.99, while Alphabet gained as much as 5% to a record of $935.90 and closed up 3.7% at $924.52 after their quarterly results beat estimates.

Combined earnings reports and expectations for S&P 500 companies show profits are estimated to have risen 13.6% in the first quarter, the most since 2011, according to Thomson Reuters I/B/E/S.

While strong earnings have kept the market at or near record levels, persistent geopolitical tensions have weighed on investors’ minds.

Intel fell 3.4% to $36.15 after the company reported lower-than-expected quarterly revenue.

Baidu ended down 4.1% at $180.23 after the Chinese Internet company forecast second-quarter revenue largely below estimates.