By Abigail Summerville
(Reuters) -U.S. stocks ended lower on Thursday, with the Nasdaq down more than 1% and technology stocks leading the declines after a disappointing forecast from Salesforce (NYSE:).
Investors also digested data showing that the economy had grown more slowly in the first quarter than previously expected. A separate report showed weekly unemployment claims rose more than expected.
Shares of Salesforce fell 19.7%, a day after the company forecast second-quarter profit and revenue below Street estimates due to weak customer spending on its cloud and enterprise business products.
The technology sector fell 2.5% and was the biggest drag on the benchmark index. The communications services sector fell 1.1%, while the rest of the S&P 500 sectors finished higher.
The Commerce Department report shows that the economy grew more slowly in the first quarter than previously expected, after downward revisions to consumer and equipment spending and a key measure of inflation turned lower ahead of the US personal consumption expenditures report. Friday of April.
“Normally, you would expect the market to recover after a GDP downward revision because that signals the economy is moderating, the Fed’s job is done and we could get rate cuts. That’s not the response we are getting today,” said Mark. Hackett, head of investment research at Nationwide.
“So I’m a little bit surprised, but not that surprised, simply because after the six weeks (rally) that we’ve had, it’s quite healthy and some consolidation or sideways movement is expected for a while.”
The S&P 500 lost 31.47 points, or 0.60%, to end at 5,235.48, while the Nasdaq Composite lost 183.50 points, or 1.08%, to 16,737.08. The Dow Jones Industrial Average fell 330.06 points, or 0.86%, to 38,111.48.
U.S. Treasury yields fell after the day’s data, while the odds of a rate cut of at least 25 basis points in September rose to 50.4%, up from 48.7% before the data, according to CME Group’s FedWatch Tool (NASDAQ:). Bond yields hit multi-week highs earlier this week.
After the close, shares of Dell Technologies (NYSE:) fell more than 12% as the company reported quarterly results. The stock ended the regular session down 5.2%.
During the regular session, shares of HP (NYSE:) rose 17% after better-than-expected second-quarter sales.
Tesla (NASDAQ:) rose 1.5% after Reuters reported that the company was preparing to register its ‘Full Self-Driving’ software in China.
Retailer Best Buy Shares of (NYSE:) rose 13.4% after beating quarterly earnings estimates, while department store chain Kohl’s (NYSE:) fell 22.9% after lowering annual revenue and earnings estimates.
Advancing issues outpaced declining issues by a 2.57-to-1 ratio on the NYSE and by a 1.41-to-1 ratio on the Nasdaq.
The S&P 500 recorded 14 new highs and 10 new lows over the past 52 weeks, while recording 51 new highs and 95 new lows.
Volume on U.S. exchanges was 12.10 billion shares, compared to the full-session average of 12.39 billion over the past 20 trading days.
