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U.S. stocks finish mixed amid economy concerns

U.S. stocks finish mixed amid economy concerns

Stocks finished a back-and-forth session mixed Thursday as investors grappled with weaker-than-expected economic data and weighed the chances of the Federal Reserve lowering interest rates.
Fed Chairman Ben Bernanke was expected to speak Friday at the central bank's annual conference in Jackson Hole, Wyoming, and said in a letter Wednesday to Senator Charles Schumer that Fed policymakers are "prepared to act as needed" if the market's turmoil damages the economy. The Fed's next meeting is September 18, but some on Wall Street expect the central bank could act sooner.
The Commerce Department said second-quarter gross domestic product grew 4.0 percent - its fastest pace in more than a year, and well above the 0.6 percent increase in the first quarter. But the broadest measure of economic health came in slightly lower than many anticipated, and the report also suggested that business investment, not consumer spending, was the main driver of growth.
In a sign that Americans' spending power may keep declining, the Labor Department said U.S. jobless claims rose last week to the highest level since April. Employment has been one of the stronger pillars of the economy recently, enabling robust consumer spending.
Considering how sluggish consumer spending has been this quarter, it's likely to post its worst back-to-back quarterly performance since early 2000, said Michael Strauss, chief economist at Commonfund. And given all of the mortgage market troubles, "There is a growing challenge for the economy to continue to grow at a 2.5 percent pace in second half of the year," he said.
To some investors, that's not bad news, because weaker-than-anticipated economic readings bolster the argument for a rate cut, which could loosen up the credit markets.
The Dow fell 50.56, or 0.38 percent, to 13,238.73 after dropping about 100 points early in the session.
Broader stock indicators finished mixed. The Standard & Poor's 500 index fell 6.12, or 0.42 percent, to 1,457.64, while the Nasdaq rose 2.14, or 0.08 percent, to 2,565.30.


Updated : 2021-05-09 18:57 GMT+08:00