U.S. equities and stock exchange traded funds slipped on the last day of month as weak economic data weighed on the markets, despite encouraging first quarter earnings results.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were down 0.2% Friday.
Earnings continued to impress, with Chevron (NYSE: CVX) and Exxon Mobil (NYSE: XOM) revealing rising profits over the first quarter. Google parent Alphabet (NasdaqGS: GOOGL) and Amazon (NasdaqGS: AMZN) also helped curb losses after reporting strong results late Thursday.
Almost 300 companies in the S&P 500 have revealed earnings, with first quarter earnings on track to increase 12% year-over-year, well above the first-quarter earnings growth of 9.1% market observers previously anticipated, the Wall Street Journal reports.
However, weak economic data kept the jubilance muted. According to the Commerce Department, U.S. gross domestic product rose 0.7% at a seasonally adjusted annual rate, compared to expectations of 1% growth.
“We need greater growth,” Kent Engelke, chief economic strategist at Capitol Securities Management, told the WSJ. “Are we having inflation and slow growth and unfolding into a stagflation environment? I’m not saying we’re there yet, but it is something to worry about because it could hurt corporate profits.”
Moreover, other data showed that the University of Michigan’s final April consumer sentiment index was at 97, below expectations of 98.
“The U.S. consumer spending is the most sensitive part of the economy and the GDP data has shown a very disappointing number,” Naeem Aslam, chief market analyst at Think Markets UK, told Reuters. “We do anticipate that it is about time that we will see some reality check here.”
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