Weak GDP Report Pulls Stocks Lower Friday, End Up For Week
COLUMBIA - All three major averages zigzagged this week between weekly gains and losses, but managed to finish in positive territory for the week. The Dow up 1% for the week. The S&P gained almost 2% for the week and the Nasdaq rose 2.3%.
But Friday, stocks actually finished somewhat mixed. The Dow rose almost 12 points to end at 14,712. But the S&P 500 and the NASDAQ both snapped a five-session winning streak. The S&P index slipped 0.2%, to end at 1,582.24. The Nasdaq, which declined 11 points to 3,279.26 Friday.
A report showing weaker-than-expected first-quarter GDP played into those losses. The US economy grew 2.5 percent, weighed down by spending cuts brought on by the sequester. The report did show consumers increased spending the most in two years, but that most likely won't continue. Another report showed consumers feel pessimistic about the economy, as consumer confidence fell to a three month low.
The economy's slow growth means the Federal Reserve will probably keep pumping cash into the economy in the form of quantitative easing. The Fed will meet next week to discuss whether it will begin tapering off the $85 billion in bonds it's buying each month.
Unemployment plays a large role in that decision and we will get an influential jobs number from the Labor department next Friday. Analysts are expecting a surge in employment after a disappointing number in March. I'll have more on the market reaction to this number in next week's Market Report.