U.S. stock futures maintained losses, signaling the Standard & Poor’s 500 Index will snap a five-day rally, as data showed the economy grew less than economists forecast in the first quarter.
Amazon.com Inc. slid 1.9% after saying it may post an operating loss in the second quarter. Starbucks Corp. dropped 2.1% as it reported sales that trailed analysts’ estimates. Expedia Inc. retreated 4.6% after lowering its full-year earnings forecast. J.C. Penney Co. jumped 7% after billionaire investor George Soros disclosed a passive stake in the retailer.
S&P 500 futures expiring in June declined 0.3% to 1,577.7 at 9:02 a.m. in New York. The equity gauge rose 0.4 % yesterday, extending its gains since April 18 to 2.8%, as companies reported earnings that beat estimates. Contracts on the Dow Jones Industrial Average slipped 39 points, or 0.3%, to 14,614 today.
“The GDP number does show that the U.S. economy is still in a slow growth mode, albeit slightly below expectations,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, said by telephone. His firm manages $110 billion. “I still like the risk reward for equities but it’s a ride the highs, buy the dips market. The market’s a little ahead of itself and frankly we’re due for a pause.”
Gross domestic product rose at a 2.5% annual rate, lower than forecast, after a 0.4% fourth-quarter advance, Commerce Department figures showed today in Washington. The median estimate of 86 economists surveyed by Bloomberg called for a 3 %gain. Consumer spending, the biggest part of the economy, climbed by the most since the fourth quarter of 2010.
The S&P 500 has surged 134% from a 12-year low in 2009 as corporate earnings beat analyst estimates and the Federal Reserve embarked on three rounds of bond purchases to spur economic growth. The benchmark gauge closed yesterday within eight points of an all-time high of 1,593.37 reached on April 11.
Fed policy makers have said they will maintain stimulus until the labor market improves “significantly.” The economy’s inability to sustain faster growth means central bankers will probably affirm a pledge to keep buying bonds when they meet next week.
Another report at 9:55 a.m. may show the Thomson Reuters/University of Michigan final index of consumer sentiment fell to a four-month low of 73.5 in April from 78.6 in March, according to the median forecast in the Bloomberg survey. The preliminary reading for April was 72.3.
Sixteen S&P 500 companies post quarterly earnings today. Of the 268 that have reported so far, 74 % have exceeded analysts’ predictions, data compiled by Bloomberg show. Profit at S&P 500 companies dropped 1.1 % in the first three months of the year, according to analysts’ projections compiled by Bloomberg.
Amazon fell 1.9 % to $269.49 as the world’s largest online retailer forecast a range between an operating loss of $340 million and a profit of $10 million for the second quarter. Analysts on average project a profit of $165.1 million. The maker of Kindle tablets said late yesterday first-quarter net income fell 37 % to $82 million, or 18 cents a share.
Starbucks slid 2.1% to $59.25 as the world’s biggest coffee-shop operator posted fiscal second-quarter revenue of $3.56 billion, missing the $3.58 billion median estimate of analysts in a Bloomberg survey.
“Europe continues to be just a challenging place for us -- it’s a very, very difficult macro environment there,” said Starbucks CFO Troy Alstead.
Expedia declined 4.6 % to $62 as Chief Financial Officer Mark Okerstrom lowered his 2013 forecast for so-called organic earnings before interest, taxes, depreciation and amortization by $20 million to $30 million, citing increased competition facing its Hotwire discount-travel website.
J.C. Penney jumped 7 % to $16.30. Soros Fund Management LLC’s stake is equal to 7.9 % of J.C. Penney, according to a filing yesterday. The investment makes the billionaire the fourth-largest shareholder, according to data compiled by Bloomberg.
The department-store chain is trying to rebound from a 25 % drop in sales and a net loss of $985 million last year under the leadership of Ron Johnson, who was replaced as chief executive officer by Myron Ullman earlier this month.
D.R. Horton Inc. increased 6.8 % to $26.20. The largest U.S. homebuilder by volume said its fiscal second- quarter profit more than doubled as demand for new houses climbed in a recovering market.