Markets close lower on weak U.S GDP data

The Toronto stock market closed lower today, with nearly all sectors down in response to lower-than-expected U.S. GDP numbers.

The S&P/TSX composite index closed down 109.31 points, or less than one per cent of its value, at 12,220.20 at the end of the trading day on Friday.

The base metals sector saw the largest decline of 2.05 per cent following a strong week for the metals, mining and gold.

Oil fell 64 cents to $93 a barrel in New York.

The loonie gained 0.38 of a cent to 98.34 cents US.

The drops followed reports from the U.S. government that its gross domestic product grew only 2.5 per cent in the first quarter of this year ? economists had expected a rate of as high as three per cent.

CIBC World Markets chief economist Avery Shenfeld said deep public sector cuts were responsible for the slower pace. "While this wasn't a weak quarter, it wasn't the bang up start to the year we had hoped for, and the signals from March suggested that we will only decelerate from here into the spring trimester," Shenfeld said.

Peter Morici, an economist and professor at the University of Maryland's Smith School of Business, says that several factors, including as a surge of Chinese exports onto American storeshelves and weakening demand for U.S. products in recession-torn Europe, will contribute to the GDP slowdown. "Most forecasters expect growth to slow to less than two per cent in the second quarter and to remain below three per cent through the end of 2014," Morici said.

The New York Stock Exchange also closed down 18.96 points, or less than a quarter of one per cent, at 9,169.90, after several companies, including Amazon.com, released weak earnings. The online retailer reported net income declined in the first three months of the year even though revenue increased 22 per cent.

The NASDAQ fell 10.72 points to 3,279.26, while the the Dow Jones Industrial dipped slightly during the day, dropping about seven points, before before eventually moving up 11.75 points to sit at 14,712.55 at closing.

Source: http://news.yahoo.com/markets-trade-lower-weak-u-gdp-data-173854384.html

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