(Updated from 10:11 a.m. EDT)
The major stock market indices opened lower this morning, and continued that trend in recent activity, as revised numbers for first-quarter
gross domestic product came in just under economists' expectations.
Today's report, the most anticipated economic event of the week, showed that first-quarter GDP was revised to 1.3%, down from a preliminary 2%, and below the 1.4% forecast. In other economic news today, the
University of Michigan's
Consumer Sentiment Index rose to 92 in May from 88.4 in April. The consumer sentiment number for the latest month was revised down from a preliminary level of 92.6.
Dow Jones Industrial Average was falling 99 points to 11023.65, while the
Nasdaq Composite Index was losing 36 points to 2246.22. Ahead of the Memorial Day weekend, trading volume was light.
Traders said that this morning's weaker than expected
durable goods orders report for April was having an impact on the action. The numbers dropped 5% from a month ago. Economists had forecast a 2% drop. Although a key manufacturing sector indicator, durable goods orders are very volatile.
"We've run up a long way, and now we're selling off on some concerning data," said Peter Blatchford, a trader at
. "The numbers leave open the possibility that the Fed will be accommodating, but they can't lower rates to zero."
An early upgrade on a trio of chip-equipment stocks by
gave some help to the semiconductor sector this morning. The securities firm raised its ratings on
to strong buy from accumulate.
The companies that saw their recommendations upped this morning were each trading ahead about 1%. The
Philadelphia Stock Exchange Semiconductor Index
was off 0.5%.
Investors continued to digest testimony last night from
Alan Greenspan, in which he said that the economy is still at risk for more weakness and hinted at the need for more rate cuts. But he also said the Fed's five interest-rate cuts since January should begin to work their way through the economy later this year.
The speech initially seemed to temper expectations that the Federal Reserve would cut interest rates by a full half-point when it next meets in mid-June. But Greenspan didn't rule out more rate cuts, by any means. The stock market may now be expecting a quarter-point cut.
Positive earnings from
, a personal television recording service, has boosted the stock 35% to $11.38. The company reported a first-quarter loss of $50.2 million, or $1.20 a share, slightly better than analysts' expectations of a $1.23 loss per share. The company posted a loss of $23.5 million, or 66 cents a share, in the year-ago period. But the first-quarter number showed sequential improvement from the loss of $2 a share in the previous quarter.
( ADCT), which posted a loss of 15 cents a share for the second quarter, missed the consensus
Thomson Financial/First Call
projection of a loss of 13 cents a share. The company forecast a bottom line in the range of break even to a loss of 5 cents for the next quarter. ADC also said it may exit its nonstrategic business practices. Investors gave ADC a cold shoulder last night, and the stock was lately down 18%.
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