US stocks sag, consumer confidence slips

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NEW YORK CITY: US stocks fell modestly on Friday (Saturday in Manila) as a key consumer confidence measure came in lower and the government confirmed that the economy contracted in the first quarter.

The Dow Jones Industrial Average lost 115.44 points (0.64 percent) to 18,010.68.

The broad-based S&P 500 shed 13.40 points (0.63 percent) at 2,107.39, while the tech-rich Nasdaq Composite Index fell 27.95 (0.55 percent) at 5,070.03.

Analysts said there was some disappointment with the economic news released Friday. The revised GDP figure for the first quarter, showing a 0.7 percent contraction, was not a surprise.


But perceptions of a rebound in growth since then were tempered by a fall in the May Chicago regional business activity index, into negative territory, and a sharp fall in the University of Michigan’s consumer confidence index to 90.7 from 95.9 in April.

The market was also being cautious going into the weekend with no deal in sight in Greece’s crunch bailout talks with official creditors.

“The consumer confidence and the Chicago PMI plunged a bit, and I think this is about Greece,” said Peter Cardillo of Rockwell Global Capital.

“The fact that (IMF chief Christine) Lagarde yesterday indicated that there is the potential for Greece leaving the eurozone, that’s on the mind on investors and ahead of the weekend, this is causing this decline.”

Market action focused on Intel and Altera after a media report said Intel’s bid for its chip-making rival is still alive. In April it was believed Altera rejected an offer reported as just above $50 a share.

Altera shares surged 4.0 percent to $48.85, while Intel was up 1.5 percent at $34.51.

Speculation on that deal came after Thursday’s announcement that telecommunications chip specialist Broadcom would be acquired by Singapore-based Avago Technologies for $37 billion.

Otherwise, losses came across the board, with Alibaba falling 1.8 percent, and AB InBev and Novartis both falling 1.5 percent.

Drug producer Merck bucked the trend with a 2.0 percent gain, after it announced it would partner with Amgen in work on developing two cancer drugs. Amgen shares lost 0.7 percent.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.10 percent from 2.13 percent Thursday, while the 30-year dropped to 2.85 percent from 2.89 percent. Bond prices and yields move inversely.

AFP

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