Wall St. Skids As U.S. Growth Slowed In First Quarter

Stocks are tumbling after a report suggesting flagging economic growth and still-high inflation hurt hopes that have kept Wall Street high recently.

Markets on Wall Street gave back some of this week’s gains early Thursday ahead of another heavy slate of corporate earnings and the government’s initial estimate of how the U.S. economy fared in the first quarter of 2024. I Photo: Whoisjohngalt Wikimedia Commons

A sharp drop for Facebook parent Meta Platforms also dragged the market lower. The S&P 500 fell 1.3% early Thursday. The Dow Jones Industrial Average lost 503 points, and the Nasdaq composite fell 2.1%.

Treasury yields jumped in the bond market after the government reported that inflation remained hotter than forecast in the first three months of the year.

It also reported that the US economy’s growth slowed during the period to a 1.6% annual rate, well below forecasts, Yuri Kageyama and Matt Ott reported for the Associated Press (AP).

After a flurry of rate hikes beginning more than two years ago, the Federal Reserve has left interest rates alone at its last five meetings.

Expectations that the US central bank would start slashing rates have been undercut by a strong economy and job market. France’s CAC 40 lost 0.9% in midday trading, while Germany’s DAX dipped 0.6%.

Britain’s FTSE 100 rose 0.7%. Japan’s benchmark Nikkei 225 slid 2.2% to 37,628.48. South Korea’s Kospi dropped 1.8% to 2,628.62.

But Hong Kong’s Hang Seng gained 0.5% to 17,284.54, while the Shanghai Composite rose 0.3% to 3,052.90. Markets were closed in Australia for a national holiday, Anzac Day.

Markets on Wall Street gave back some of this week’s gains early Thursday ahead of another heavy slate of corporate earnings and the government’s initial estimate of how the U.S. economy fared in the first quarter of 2024.

Futures for the Dow Jones industrials and the S&P 500 each declined 0.6% before the bell. Southwest Airlines fell nearly 8% after the carrier said it lost $231 million in the first quarter and will limit hiring, offer voluntary leave to employees and stop flying to four airports.

CEO Robert Jordan said the airline was reacting quickly “to address our financial underperformance” and cope with delayed deliveries of new planes from Boeing.

American Airlines reported a $312 million loss in its most recent quarter as labor costs rose, but said it expects to return to profitability in the second quarter. That sent its stock up 5.2% before markets opened Thursday.

Facebook and Instagram parent company Meta fell 15.6% in after-hours trading when it issued lukewarm revenue guidance after the bell Wednesday along with otherwise strong first-quarter financial results.