U.S. equities finished lower, as a stronger-than-expected Q4 GDP report was overshadowed by more discouraging Chinese manufacturing data.
Treasury yields finished higher following the domestic output report while crude oil prices were mixed, gold declined and the U.S. dollar was nearly unchanged.
The Dow Jones Industrial Average declined 69 points (0.3%) to 25,916
The S&P 500 Index dipped 8 points (0.3%) to 2,784
The Nasdaq Composite decreased 22 points (0.3%) to 7,533
In heavy volume, 1.3 billion shares were traded on the NYSE and 2.6 billion shares changed hands on the Nasdaq
WTI crude oil increased $0.28 to $57.22 per barrel and wholesale gasoline was down $0.01 to $1.75 per gallon
The Bloomberg gold spot price traded $5.96 lower to $1,313.90 per ounce
The Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.2% at 96.18
Q4 GDP growth tops forecasts
The first look (of two) at Q4 Gross Domestic Product, the broadest measure of economic output, showed a quarter-over-quarter annualized rate of expansion of 2.6%, after the unrevised 3.4% expansion in Q3, and north of the 2.2% growth forecasted by Bloomberg. Personal consumption gained 2.8%, below forecasts of a 3.0% rise, and following the unadjusted 3.5% increase recorded in Q3. The report was delayed due to the government shutdown and combines the advance and secondary estimates.
On inflation, the GDP Price Index came in at a 1.8% rise, above expectations of a 1.7% gain and matching the unrevised increase seen in Q3, while the core PCE Index, which excludes food and energy, moved 1.7% higher, north of expectations to match the unadjusted 1.6% advance in Q3.
Treasuries were lower, as the yields on the 2-year note and the 30-year bond rose 2 basis points (bps) to 2.52% and 3.08%, respectively, while the yield on the 10-year note was 4 bps higher at 2.72%. Bond yields added to a weekly gain, while the U.S. dollar reversed course and was flat on the data and in the wake of this week’s Congressional monetary policy testimony by Fed Chairman Jerome Powell, in which he reiterated the Central Bank’s recent pivot to a more dovish stance.
Weekly initial jobless claims rose by 8,000 to 225,000, versus forecasts calling for an increase to 220,000, with the prior week’s figure being upwardly-revised to 217,000. The four-week moving average fell by 7,000 to 229,000, while continuing claims rose by 79,000 to 1,805,000, north of estimates of 1,737,000.
Europe mixed, Asia lower on data and flared-up geopolitical concerns
European equities finished mixed, with a stronger-than-expected U.S. Q4 GDP report being countered by another dose of disappointing Chinese manufacturing data, while geopolitical concerns flared up after the U.S. and North Korean summit was cut short without a deal.
U.K. Brexit concerns persisted, with a series of Parliamentary votes over the next two weeks on a no-deal Brexit and extending the divorce deadline looming. German consumer price inflation for February came in a bit hotter than expected, while French consumer spending also rose more than anticipated in January. The euro ticked higher and the British pound dipped versus the U.S. dollar, while bond yields in the region were mostly higher.
Asian stocks finished mostly lower, with South Korea’s market leading the way, after a summit between the U.S. and North Korea was cut short without a deal. Japanese equities dropped, with the yen trimming a recent decline even as data showed the nation’s industrial production and retail sales both fell more than expected in January.
Shares traded in mainland China and Hong Kong declined after the country’s official Manufacturing PMI Index showed contraction for the third-straight month and a three-year low in February as export orders declined further amid the ongoing trade dispute with the U.S. However, the report showed new orders improved and a complementary read on the nation’s services sector output continued to show expansion.