By Sue Chang and Joseph Adinolfi, MarketWatch

Weak consumer spending, Chicago PMI cast doubts on strength of U.S. economy

Stocks fell on Friday as blue-chip tech shares dragged on the market, but the S&P 500 and the Dow Jones Industrial Average clung to April gains to score the second monthly rise in a row.

The S&P 500 slid 10.51 points, or 0.5%, to close at 2,065.30 on the back of big losses in the health-care and technology sectors. The blue-chip index rose 0.3% for the month.

The Dow Jones Industrial Average dropped 57.12 points, or 0.3%, to close at 17,773.64 but managed to finish out the month 0.5% higher.

The Nasdaq shed 29.93 points, or 0.6%, to finish at 4,775.36 for a monthly decline of 1.9%.

Weaker-than-expected earnings from bellwethers Apple Inc. (AAPL) and Intel Corp. (INTC) triggered a selloff in tech shares, with Apple shedding 14% and Intel dropping 6.5% in April. Shares of the iPhone maker were further battered after billionaire Carl Icahn on Thursday revealed he dumped his entire stake in the iPhone maker over China worries (http://www.marketwatch.com/story/carl-icahn-dumps-apple-stake-amid-china-concerns-2016-04-28).

"The market had been overbought after the strong run up. With high profile technology stocks, especially Apple, missing estimates, investors were quick to take profits," said Quincy Krosby, market strategist at Prudential Financial.

See:Stock pickers beware, this unwelcome pattern is driving markets again (http://www.marketwatch.com/story/stock-pickers-beware-this-unwelcome-pattern-is-driving-markets-again-2016-04-29)

While the earnings flow was light during the day, stocks were still reeling from a sharp selloff in the second half of a Thursday session that was driven by a number of factors--including a weak reading on U.S. first-quarter gross domestic product and a surprise decision by the Bank of Japan to leave monetary policy on hold. Dow industrials had stumbled more than 200 points (http://www.marketwatch.com/story/dow-faces-near-100-point-loss-as-boj-surprises-market-with-no-change-2016-04-28) on Thursday for their worst drop in two months.

"When you get that kind of late-day price action when the market is higher most of the session then just pukes into the close, that means the tone has shifted under the surface," said Mike Antonelli, equity sales trader at R.W Baird & Co. "You've kind of run out of steam at 2,100."

Official data showed consumer spending barely rose in March as consumers opted to save, stoking concerns that second quarter growth might also disappoint after a report on first quarter growth released Thursday was weaker than expected.

The PCE price index, the Federal Reserve's preferred measure of inflation, showed price pressures abated in March, seeming to confirm fears voiced by Fed Chairwoman Janet Yellen that the rise in inflation seen at the beginning of the year might not endure.

"Consumers are two-thirds of the economy and they're not spending much. It's going to be hard to get the data to look much better without them," said Paul Nolte, portfolio manager at Kingsview Asset Management.

Data: Personal income and outlays data showed consumer spending rose a meager 0.1% in March, missing Wall Street expectations. (http://www.marketwatch.com/story/consumer-spending-rises-scant-01-in-march-2016-04-29)

Chicago PMI fell to 50.4 in April, yet another sign that manufacturing activity in the U.S. has softened so far this year. (http://www.marketwatch.com/story/chicago-pmi-falls-to-504-april-in-sign-of-economic-weakness-2016-04-29)

Stocks to watch: LinkedIn Corp.(LNKD) rose after its earnings and its outlook surpassed analysts expectations. Read:LinkedIn not quite dead yet (http://www.marketwatch.com/story/linkedin-not-quite-dead-yet-2016-04-28)

Baidu.com Inc. (BIDU) shares gained 4.5% soared on better-than-expected quarterly results (http://www.marketwatch.com/story/baidu-shares-rally-on-better-than-expected-earnings-2016-04-28).

Chevron Corp.(CVX) shares slipped 0.2% after a lackluster earnings report.

TiVo Inc.(TIVO) shares jumped 5.9% after Rovi Corp.(ROVI) announced a cash-and-stock deal for the maker of the TiVo branded digital video recorder worth $1.1 billion.

Caterpillar Inc.(CAT) fell fractionally after announcing it would close five U.S. plants and shed about 820 positions (http://www.marketwatch.com/story/caterpillar-to-shut-5-us-plants-cut-more-than-800-jobs-2016-04-28)as part of a strategy outlined in September.

Other markets: The dollar continued to weaken against the yen on Friday (http://www.marketwatch.com/story/yen-rips-higher-against-dollar-after-boj-shocks-market-with-no-action-2016-04-28), struggling to hang onto the Yen107 level even with Tokyo markets closed for a holiday.

Pressure on the dollar continued to drive up precious metals, with gold up 1.9% to $1,290.50 an ounce.

Read: Why gold's upward march has everything in its favor (http://www.marketwatch.com/story/gold-has-everything-in-its-favor-2016-04-22)

Oil futures settled lower (http://www.marketwatch.com/story/oil-prices-fall-as-some-investors-cash-out-on-aprils-big-gains-2016-04-29), with U.S. crude down 11 cents, or 0.2%, at $45.92 a barrel.

The Stoxx Europe 600 index (http://www.marketwatch.com/story/european-stocks-slide-as-gdp-data-earnings-stream-in-2016-04-29) fell 2.1% amid the region's own data deluge, while the Hong Kong Hang Seng Index (http://www.marketwatch.com/story/asian-markets-keep-sliding-in-wake-of-japans-inaction-2016-04-28) slid 1.5%.

--Barbara Kollmeyer contributed to this report.

(END) Dow Jones Newswires

April 29, 2016 16:38 ET (20:38 GMT)

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