Wall Street: Growth of the US GDP Did Not Encourage Investors

On Wall Street, the leading indices remained almost unchanged on Friday as the stronger-than-expected growth of the US GDP in the past quarter did not encourage investors, given that disappointing signals are coming from the economy.

The Dow Jones index strengthened by 4 points, or 0.04 percent, to 10,325 points, while the S&P 500 rose by 0.14 percent to 1,104 points. The Nasdaq index gained 0.18 percent, reaching 2,238 points. Revised data shows that in the last quarter of last year, the US gross domestic product grew by a surprisingly strong 5.9 percent. However, this data did not spur investors as analysts attribute the stronger growth to inventory accumulation, and in addition, fresh data from the beginning of the year indicates that economic growth will slow down. This is indicated by the data released yesterday showing that in January, existing home sales in the US fell by 7.2 percent, while analysts expected an increase in sales. As it was announced a few days earlier that new home sales also sharply declined in the same month, it is clear that the real estate market is still not recovering, nor is American consumer spending.

"Today there were many macroeconomic data, and most of them were weaker than expected. Nevertheless, the weakening of the dollar positively affected the market as it spurred the growth of exporter stock prices," says Peter Jankovskis, director at OakBrook Investments. Investors were also disappointed by a larger-than-expected quarterly loss of American International Group of $8.9 billion, causing the stock price of the largest US insurer to drop by 10 percent. After two weeks of consecutive growth, last week the Dow Jones index fell by 0.7 percent, while the S&P 500 weakened by 0.4, and the Nasdaq index by 0.3 percent. On the other hand, throughout February, stock prices recorded the largest monthly growth since November of last year. The Dow Jones index jumped by 2.6 percent, while the S&P 500 gained 2.9, and the Nasdaq index 4.2 percent. On European exchanges, stock prices rose sharply yesterday. The London FTSE index strengthened by 1.45 percent to 5,354 points, while the Frankfurt DAX rose by 1.20 percent to 5,598 points. The Paris CAC jumped by 1.87 percent to 3,708 points. (H)