Futures Fall Slightly After GDP, Jobless Claims
Stock index futures fell slightly ahead of the open on Wall Street Thursday after news that the economy slowed significantly in the first quarter, and jobless claims rose more than expected.
The nation's gross domestic product grew at an annual rate of 1.8 percentin the first quarter compared with a 3.1 percent gain in the fourth quarter last year, according to the first reading by the govenrment.
The slowdown is viewed as a temporary result of high gas prices, which are expected to stabilize, according to economists, including Federal Reserve Chairman Ben Bernanke, Reuters reported.
Initial jobless claims for the week ended April 23 rose by 25,00 to 429,000, the highest level since January, the Labor Department said. The prior week's claims were revised upward to 404,000 from 403,000. Economists surveyed by Reuters had expected claims would fall to 392,000.
Investors also continued to digest remarks made by Federal Reserve Chairman Ben Bernanke, who addressed the press after the central bank’s rate-setting meeting on Wednesday, sending the markets higher in late afternoon trading.
The first step in raising rates could occur when the Fed stops reinvesting the proceeds of its bond holdings, Bernanke said, saying the Fed's policy making committee would make that decision "based on our view of how sustainable the recovery is."
A big batch of earnings were released before the market opened. Exxon Mobil fell slightly as investors focused on revenues that fell shyof expectations, although profits were better than expected.
Procter & Gamble sank afterlowering the high end of its profit forecastbecause of rising materials costs.
And PepsiCo fell after saying rising costs hurt first quarter profitsfor the snacks and drinks maker.
While Dow Chemical gained after posting strong first quarter profits, driven by rising demand for plastics.
Starbucks was another stock in focus. The group warned after Wednesday’s close that rising fuel and dairy costs will take a bigger chunk out of earnings than previously expected and issued a forecast that disappointed the market.
In M&A news, Exelon confirmed it will buy Constellation Energy for $7.9 billion. The deal between the rival power companies would involve Constellation shareholders recieving 0.93 shares of Exelon stock for each Constellation share. Shares of both companies gained.
stepped up calls on shareholders to back a bid from Deutsche Boerse as it unveiled strong first-quarter results.
Also in Europe, shares in Shell and Deutsche Bank gained after both companies reported higher first-quarter profits.
On Tap This Week:
THURSDAY: Pending home sales, 7-year Treasury note auction; Earnings after-the-bell from Microsoft, Motorola Mobility.
FRIDAY: Personal income, personal spending, Chicago PMI, Consumer Sentiment; Earnings before-the-bell from Caterpillar, Chevron, Merck, DR Horton.
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