By Anora Mahmudova and Barbara Kollmeyer, MarketWatch
Altera gains on potential Intel deal news
U.S. stocks edged lower on Friday following a report showing the
economy contracted during the first quarter for the second straight
year.
The second estimate of gross domestic product showed the economy
shrank at an 0.7% annual pace during the first three months of the
year versus a 0.2% growth estimated previously.
The main indexes were on track to finish the week modestly
lower, but set to end the month with gains.
The S&P 500 (SPX) slipped 5 points, or 0.2%, lower at 2116.
The Dow Jones Industrial Average (DJI) dropped 61 points, or 0.3%,
to 18,073. The Nasdaq Composite (RIXF) was off by 5 points, or
0.1%, at 5091.
Michael Arone, chief investment strategist at State Street
Global Advisors U.S. business, said while the revision was better
than expected, he is still looking for signs that the weakness was
transitory and weather related.
"While we did pay attention to the drop in earnings in the
report, that can be explained by the stronger dollar, which hurt a
lot of multinational companies and the drop in oil prices that hurt
energy firms. As the dollar and oil stabilized, we expect to see
higher profits that will drive prices in the near term," Arone
said.
European stocks
(http://www.marketwatch.com/story/european-stocks-drop-as-greece-worries-persist-but-stocks-looking-at-monthly-win-2015-05-29)
eased as a deadline approached for Greece to make the first of debt
repayments to the International Monetary Fund in the space of two
weeks.
Read: Fatal flaw in GDP? Investors latch onto new tool to track
economy
(http://www.marketwatch.com/story/new-tool-to-track-gdp-may-cause-as-much-problems-as-it-solves-2015-05-27)
(http://www.marketwatch.com/story/new-tool-to-track-gdp-may-cause-as-much-problems-as-it-solves-2015-05-27)Wouter
Sturkenboom, senior investment strategist at Russell Investments in
London, said Wall Street is definitely weary from trying to surmise
when the Federal Reserve will hike interest rates.
"We are now in this weird zone where people wonder if good news
is bad news, or simply good news after all. It looks like it will
be difficult for U.S. stocks to break out of its current trading
range," said Sturkenboom in emailed comments.
The Chicago Purchasing Managers Index for May will hit at 9:45
a.m. Eastern Time. A reading on the May University of Michigan
consumer sentiment index is to follow at 10 a.m.
Read: Fatal flaw in GDP? Investors latch onto new tool to track
economy
(http://www.marketwatch.com/story/new-tool-to-track-gdp-may-cause-as-much-problems-as-it-solves-2015-05-27)
(http://www.marketwatch.com/story/new-tool-to-track-gdp-may-cause-as-much-problems-as-it-solves-2015-05-27)Stocks
to watch: Shares of chip maker Altera Corp.(ALTR)(ALTR) rose 4.8%
after the New York Post reported Intel Corp.(INTC) is nearing a
deal
(http://www.marketwatch.com/story/intel-in-talks-to-buy-altera-for-15-billion-report-2015-05-29)
to buy its smaller rival. Intel shares rose 1.1%.
Shares of Google Inc.(GOOG) were lower after the company
unveiled Android Pay
(http://www.marketwatch.com/story/google-switches-up-mobile-payments-with-android-pay-2015-05-28),
a new mobile payment service that is expected to compete directly
with Apple Inc.'s(AAPL) Apple Pay.
Also read: GoPro teams up with Google for VR video system
(http://www.marketwatch.com/story/gopro-gets-a-jump-on-googles-vr-video-system-2015-05-29)
Other markets: The dollar
(http://www.marketwatch.com/story/dollar-lower-against-yen-on-profit-taking-2015-05-29-2103228)(USDJPY)
was down, last changing hands around 123.90 yen. Oil prices
(http://www.marketwatch.com/story/oil-extends-gains-investors-eye-next-weeks-opec-meeting-2015-05-29-2103236)(CLN5)
moved higher as the dollar stepped back slightly and investors
looked ahead to a meeting of the Organization of Petroleum
Exporting Countries next week. Gold prices (GCN5) were flat. The
Shanghai Composite finished with a slight loss on Friday, after a
6.5% plunge Thursday.
Also read: Here's what's driving the dollar-yen trade
(http://www.marketwatch.com/story/heres-whats-driving-the-dollar-yen-trade-2015-05-28)
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