By Sruthi Shankar and Amy Caren Daniel
(Reuters) – U.S. stocks came under pressure on Friday, hit by weak results from Intel and Exxon Mobil, with mixed first-quarter GDP data adding to a somber mood.
The Commerce Department said gross domestic product rose at a 3.2 percent annualized rate, boosted by a smaller trade deficit and the largest accumulation of unsold goods since 2015 – temporary factors that are likely to reverse in the coming quarters.
The report also showed consumer and business spending slowed sharply, and investment in homebuilding contracted for a fifth straight quarter, giving it a weak tone.
“We had a pretty big beat on GDP today, but some underlying numbers are giving investors a pause on where they see future growth coming from given the consumer spending levels,” said Mike Loewengart, vice president of investment strategy at E*Trade Financial.
“Earnings have largely been good, but there have been some misses, which investors are trying to make sense of and that’s why we have this sideways move in markets.”
Dragging down the three main indexes was Intel Corp, which slumped 10.4% after it cut its full-year revenue forecast and missed quarterly sales estimate for its key data center business.
Semiconductor stocks took a beating, with the Philadelphia chip index falling 1.52%, while the broader technology sector declined 0.67%.
Exxon Mobil Corp was down 2.7% as the company’s quarterly profit missed estimates on lower oil and gas prices and weakness across its businesses.
Despite weak results from some marquee names, more than three-quarters of the 229 S&P 500 companies, which have reported so far, have topped earnings estimate, according to Refinitiv data.
The forecast for earnings growth has also improved to a 0.3% decline from a 2.3% drop estimated at the start of the quarter.
That, in part, has put the S&P 500 closer to an all-time high and pushed the Nasdaq to a record high on Wednesday. Stocks have rallied this year on hopes of a U.S.-China trade resolution and a turnaround in the Federal Reserve’s stance to abandon further interest rate hikes this year.
At 12:48 p.m. ET the Dow Jones Industrial Average was up 12.56 points, or 0.05%, at 26,474.64, the S&P 500 was up 3.57 points, or 0.12%, at 2,929.74 and the Nasdaq Composite was down 4.37 points, or 0.05%, at 8,114.31.
Offering support to markets was Amazon.com Inc, which rose 1.3% after the e-commerce giant reported quarterly profit that doubled and beat estimates on soaring demand for its cloud and ad services.
Walt Disney Co rose 1.3% after Marvel Studios superhero spectacle “Avengers: Endgame” hauled in a record $60 million at U.S. and Canadian box offices during its Thursday night debut.
Ford Motor Co surged 10.3% and was the biggest gainer on the S&P after the automaker posted better-than-expected quarterly earnings largely due to strong pickup truck sales in its core U.S. market.
Their shares drove a 0.6% gain in the consumer discretionary sector.
The energy sector fell 1.74%, the most among the three S&P sectors in the red, weighed down by lower crude prices and Exxon’s downbeat results.
Mattel Inc jumped 4.1% after the toymaker beat analysts’ estimates for quarterly revenue, as a more diverse range of Barbie dolls powered sales in the United States.
Advancing issues outnumbered decliners by a 1.99-to-1 ratio on the NYSE and by a 1.67-to-1 ratio on the Nasdaq.
The S&P index recorded 33 new 52-week highs and two new lows, while the Nasdaq recorded 59 new highs and 32 new lows.
(Reporting by Sruthi Shankar and Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta and Anil D’Silva)