“Stocks were weakening in the final hour of trading Tuesday amid mixed headlines from Europe that set signs of economic strength in Germany against the failure of Greek political leaders to form a new government,” Andrea Tse reports for The Street. “The Dow Jones Industrial Average was down 69 points, or 0.55%, at 12,626. The S&P 500 was losing 8 points, or 0.59%, at 1330, and the Nasdaq was off 9 points, or 0.30%, at 2894. May has been a dismal month so far for the major U.S. equity indices with the Dow falling in eight of the past nine sessions, losing more than 4% after a modest rally on May 1. Both the S&P 500 and Nasdaq are off similar amounts since that time. Tuesday’s volumes were running light with 3.2 billion shares changing hands on the the New York Stock Exchange and trading on the Nasdaq just above 1.4 billion.”
“Stocks tumbled Monday on Greece’s inability to break a political impasse fueled speculation the country may eventually have to leave the eurozone and destabilize the entire continent,” Tse reports. “The impact of this development — not exactly a stunner given the disarray that’s been evident in Greece since the elections less than 10 days ago — was being mitigated by a much stronger-than-expected German gross domestic product report. The eurozone’s leading economy posted preliminary, seasonally adjusted, first-quarter GDP growth of 0.5%, compared with a contraction of 0.2% in the fourth quarter. The performance beat even the highest estimate for growth of 0.2% among economists polled by Thomson Reuters. On a year-over-year basis, Germany’s economy expanded 1.7% in the first quarter from 1.5% in the fourth quarter.”
Tse reports, “In U.S. economic news, the Labor Department’s April consumer price index was unchanged in April, as expected, after rising 0.3% in March. The core number, which excludes volatile food and energy items, rose 0.2%, also meeting the consensus view, after rising 0.2% in March. The Commerce Department said that retail sales rose 0.1% in April, slightly below estimates of 0.2% growth after an advancement of 0.7% in March.”
“Apple shares were losing nearly 1%, sitting near their lows of the session. Sterne Agee saying it believes iPhone expectations for the next two quarters are too high,” Tse reports. “‘Based on our supply chain work, we believe significant iPhone upside over the next two quarters is less likely based on reduced supplier build plans,’ wrote analyst Shaw Wu, who has a buy rating and $780 price target on the stock. ‘Conversely, the likelihood of iPad upside appears higher due to additional screen supply.’ The shares were off $5.37 to $552.85 in late trades.”
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