BUSINESS US stocks retreat after downcast GDP data

BUSINESS

US stocks retreat after downcast GDP data

AFP

22:31, July 28, 2022

Wall Street stocks retreated early Thursday following mixed earnings as a gloomy reading on US gross domestic product added to recession fears.

(Photo: AFP)

GDP declined at an annual rate of 0.9 percent in the second quarter, following a bigger drop in the first three months of the year, according to the Commerce Department.

Two quarters of negative growth is commonly viewed as a strong signal that a recession is underway, although Federal Reserve Chair Jerome Powell said Wednesday that the strong US labor market is not indicative of a recession.

Regardless of whether the United States is in recession, the GDP data "makes it clear that the economic environment has undoubtedly weakened, which shouldn't be a total surprise in light of more recent incoming data of late," said Briefing.com analyst Patrick O'Hare.

About 20 minutes into trading, the Dow Jones Industrial Average was down 0.3 percent at 32,093.65.

The broad-based S&P 500 fell 0.4 percent to 4,006.48, while the tech-rich Nasdaq Composite Index dropped 0.7 percent to 11,949.14.

Among individual stocks, Facebook parent Meta Platform tumbled 8.5 percent as it posted its first quarterly revenue drop as the social media powerhouse battles a turbulent economy and the rising phenomenon of TikTok.

But Ford rose 3.6 percent as the US auto giant reported increased second-quarter profits on a surge in auto sales that more than offset the hit from higher costs.

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