US open: Stocks slide after raft of disappointing data

US stocks lost ground early on Friday as investors digested a number of unimpressive economic reports.

Just after 15:00 BST, the Dow Jones Industrial Average was down 72 points, while the S&P 500 and the Nasdaq lost four and six points respectively.

Friday data

Revised data showed US gross domestic product shrank at an annualised pace of 0.7% in the first three months of the year.

The preliminary estimate from the Department of Commerce was a contraction of 0.2%, while economists had been expecting a fall of 0.9%.

Analysts said the disappointing reading was likely to be offset by a rebound in the second quarter.

“While a second quarter rebound therefore looks to be almost certain, the extent of the recovery from the first quarter weakness may disappoint," said Markit chief economist Chris Williamson.

"Any such signs of underlying weakness will inevitably cause the Fed to push out the timing of the first rate hike into next year.

"However, if the data continue to show robust growth and hiring, with wage growth also reviving, a September rate hike remains firmly on the table.”

US personal consumption grew at a 1.8% annualised rate in the first quarter, revised down from an initial estimate of 1.9%, falling short of the 2% gain analysts had expected.

The Chicago Purchasing Managers' Index fell sharply in May, dropping from 52.3 in April to 46.2, missing analysts' expectations for a slight increase to 53.

US consumer confidence fell to a six-month low in May, according to the University of Michigan Index, which fell to 90.7 in May compared with a final April level of 95.9.

Analysts had expected a final May reading of 89.5, compared with a preliminary print of 88.6.

Greek worries

Elsewhere, European stocks were broadly lower as concerns over Greece’s situation continued to mount and threatened to influence the US session.

“The US market is separated from Europe by the Atlantic but the shock waves can be felt in Wall Street, and the prospect of an interest rate hike is also playing on dealers’ minds,” said IG’s market analyst David Madden.

The dollar was broadly flat against the yen but gained 0.25% against the pound and fell 0.20% against the euro, while gold futures slid 0.01% to $1,188.70.

Oil prices advanced, as West Texas Intermediate gained 1.38% to $58.49 a barrel, while Brent climbed 1.54% to $63.56 a barrel.

Altera surges on takeover rumours

In company news, Altera gained 4.11% ahead of the bell after the New York Post reported Intel was edging closer to a $15bn takeover of the chip maker.

Morgan Stanley and Goldman Sachs fell 0.49% and moved 0.64% higher, respectively after Moody’s Investors Service raised its credit ratings for the banks late on Thursday.