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The Dow continued to decline on Thursday as a rough holiday-shortened trading week continued.
The Commerce Department reported on Thursday that Gross Domestic Product grew at a 1.3% annualized rate from January through March, down from the advance estimate of 1.6%. The report also indicated that consumer spending grew at a 2% pace rather than the stated 2.5%.
The 10-year Treasury yield, which topped 4.6% for the first time in a month on Wednesday, dropped again on Thursday to 4.5%. A higher yield can be detrimental for stock investors as it indicates that investors are not willing to take risks and are looking for safer investments, such as Treasury bills.
On Friday, investors will watch for the Personal Consumption Expenditures Price Index, which measures the prices that U.S. residents pay for goods and services. It’s a key inflation indicator that will help decide whether the Fed will reduce the interest rate this year or not.
In mid-day Thursday trading, the Dow Jones Industrial Average dropped 386 points, or about 1%, to 38,055. The Nasdaq lost 0.75%, while the S&P 500 shed 0.48%.
Salesforce is down over 20%
Salesforce’s stock dropped by over 20% in mid-day trading — its worst day since 2004 — after falling short of revenue expectations for the first fiscal quarter. Additionally, the company’s earnings and revenue outlook for the second quarter did not meet Wall Street’s estimates.
The cloud software company reported adjusted earnings per share of $2.44, compared to $2.38 expected. Revenue was $9.13 billion, compared to an expected $9.17 billion.
Salesforce’s revenue guidance remains at $37.7 billion to $38 billion. Analysts were expecting $9.76 in adjusted earnings per share and $38.08 billion in revenue.
HP stock reaches new 52-week high
HP reached its new 52-week high Thursday after surging over 16% in mid-day trading. The technology company released its quarterly report on Wednesday after the market closed. It reported quarterly earnings of $0.82 per share, beating Wall Street’s estimate of $0.81 per share. The company reported revenue of $12.80 billion, better than the expected $12.60 billion.
Foot Locker stock jumps over 23%
Foot Locker’s shares rose more than 23% in mid-day trading after its earnings per share exceeded expectations. The sneaker retailer’s sales grew 2% to $759 million. The company reported quarterly adjusted earnings per share of $0.22, surpassing expectations of $0.12. Its revenue was in line with expectations at $1.88 billion.