U.S. stocks declined in early trade on Thursday after government reports showed that US economic activity slowed significantly in the first quarter and applications for jobless benefits unexpectedly increased.
The S&P 500 Index declined 1.36 points, or 0.10 percent, to trade at 1,354.11 at 9:40 a.m. EDT. The Dow Jones Industrial Average fell 13.55 points, or 0.11 percent, to trade at 12,677.41. The Nasdaq Composite Index declined 0.15 percent.
US GDP growth in 2011 first quarter slowed to an annual rate of 1.8 percent, compared to a rate of 3.1 percent in fourth quarter 2010 and 3.7 percent in first quarter 2010. The growth rate of 1.8 percent reflects positive contribution from personal consumption, private inventory investment, exports, and nonresidential fixed investment. Drags on the growth rate include federal government spending, local government spending, and imports.
The Department of Labor reported that initial jobless claims increased by 25,000 to 429,000 for the week ended April 23 from the previous week's revised figure of 404,000, while economists expected 390,000. The 4-week moving average of initial claims increased 9,250 to 408,500 from the previous week's revised average of 399,500.
On the corporate front, Constellation Energy Group Inc. (NYSE:CEG) shares gained 3.76 percent after Exelon Corp. (NYSE:EXC) and Constellation announced that they have signed a definitive agreement to combine the two companies in a stock-for-stock transaction.
Sprint Nextel Corp. (NYSE:S) shares advanced 1.88 percent to $4.88 as its first quarter loss narrowed from previous year. Net loss narrowed to $439 million or $0.15 per share compared to $865 million or $0.29 per share in the same quarter last year, while analysts’ estimated net loss of $0.22 per share for the first quarter.
Procter & Gamble Co. (NYSE:PG) shares declined 1.55 percent to $63.03 as its third quarter earnings fell short of some analyst’ estimation due to higher raw material and marketing costs. Net income rose to $2.87 billion or $0.96 per share compared to $2.59 billion or $0.83 per share in the same quarter last year, while analysts’ expected net profit of $0.7 per share.
US stocks rallied to new multi-year highs on Wednesday after Fed renewed its pledge to stimulate growth with low rates and said a pickup in inflation is likely to be temporary.
The euro advanced 0.08 percent to 1.4800 against the dollar and the yen gained 0.83 percent against the greenback.
Crude oil futures advanced 0.06 percent to $112.83/barrel and gold futures gained 0.89 percent.
European stock markets are currently trading mixed with FTSE 100 down by 12.86 points, DAX30 up by 34.26 points and CAC 40 up by 20.81 points.