US stocks extended their losses to pare their rally this month on data that showed that the US economy contracted in the first quarter for the second consecutive year and that consumers remained cautious.
The S&P 500 Index most recently slipped 5 points or 0.2% at 2116 points. All the index’s 10 major indexes were lower on the day with industrial sector leading the losses with a 1.15% decline.
The benchmark index is on course to end the week moderately lower but higher for the month.
The Dow Jones Industrial Average fell 61 points or 0.34% at 18,073 points while the technology heavy Nasdaq Composite fell by 5 points or 0.09% at 5091 points. The two indexes were also set to end the week in losses.
The Commerce Department during their second reading of the US economic input for the first three months of 2015 that gross domestic product contracted by 0.7%. The first reading showed that the economy contracted by a slower rate of 0.2%.
The consensus estimate forecast by analysts polled by the Wall Street Journal was a downward revision of the first revision to a 1% contraction.
Separately, a reading on the consumer sentiment in the US showed that market sentiment in the US was higher than expected for May but still well below the April level. The Chicago business PMI, also known as the Chicago business barometer also fell during the same period.
“GDP is kind of an old story — we already knew it contracted, but the Chicago PMI number came in unexpectedly low,” Kevin Caron, a market strategist and portfolio manager who helps oversee $170 billion at Stifel Nicolaus & Co. in Florham Park, New Jersey, told Bloomberg.
“It could be that the market was hoping for a better number, and didn’t get the support it wanted. There’s conflicting data on the strength of the economy.”
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