U.S. Stocks Lower on Jobless Claims Increase and GDP Estimate of 1.8%

Bikram Pandey
26 May, 2011
New York City

U.S. stocks fell after the weekly unemployment claims increased and first quarter GDP estimate was left unchanged at 1.8%. Market sentiment weakened after the GDP data was not revised higher. Tiffany gained on better than expected earnings. Big Lots estimated lower than expected quarterly net.

[R]11:10 AM New York – U.S. stocks traded down after the weekly unemployment claims increased and first quarter GDP estimate was left unchanged at 1.8%. Market sentiment weakened after the GDP data was not revised higher. Tiffany gained on better than expected earnings and Big Lots estimated lower than expected quarterly earnings.[/R]

U.S. stocks edged lower after the unemployment claims rose and the latest read on the first quarter GDP was left unrevised.

U.S. Commerce Department said economy expanded at 1.8% in the first quarter. The data was unrevised from the previous estimate in April. The U.S. economy expanded at 3.1% in the fourth quarter.

The price index of gross domestic purchases increased 2.2% in the quarter compared to 1.1% in the fourth. Change in private inventories added 1.19% compared to 3.42% in the fourth.

Seasonally adjusted U.S. weekly jobless claims increased 10,000 to 424,000 from the revised previous week revised claims of 414,000.

The preliminary insured unemployment rate in the week ending May 14 fell 0.1% from the prior week''s unrevised rate of 3.0%.

Across the Atlantic in Europe, DAX 30 index in Germany declined 0.4% to 7,145.83 and CAC 40 index edged up 1.18 to 3,927.16. The index in Spain inched up 0.3% and in Italy was nearly flat.

Stock Movers

Spirit Airlines priced 15.6 million shares in its public offering at $12 each, below its original filing price range between $14 and $16. The company in its September regulatory filing had estimated to raise as much as $300 million.

Banco Santander Rio SA filed with the Securities and Exchange Commission to raise as much as $100 million in an initial public offering. The Argentine bank is controlled by Spain based Banco Santander SA.

Lone Pine Resources Inc priced 15 million shares initial public offering at $13 a share. Alberta, Canada based oil and gas explorer previously known as Canadian Forest Oil Ltd in December filing had planned to raise as much as $375 million.

Skype, the online chat and video conferencing site has suffered outage for more than three hours. The company recently acquired by Microsoft said in a statement that Windows users are having difficulty in connecting with the service and said it has identified the problem and “will issue a fix in the next few hours.”

Big Lots Inc ((BIG)) decreased more than 2% after the discount retailer estimated second quarter earnings between 38 cents and 48 cents a share.

Family Dollar Stores Inc increased 3% after the activist investor Bill Ackman controlled Pershing Capital Management took a stake in the company and said that company may be acquired and fairly priced.

Guess? Inc surged 12% after the apparel retailer estimated adjusted second quarter earnings of as much as 83 cents a share.

Tiffany & Company gained 8% after the luxury retailer reported first quarter earnings ahead of expectations and raised its full year earnings estimate.