US: Stocks mixed as traders look past GDP report

[NEW YORK] US stocks finished near all-time highs Friday, Treasuries gained and oil closed in on US$50 a barrel even after the world's biggest economy reported its slowest pace of expansion in three years.

Global equities fell, trimming a sixth straight monthly advance, as geopolitical concerns linger. The Nasdaq 100 Stock Index added to its record peak as Alphabet Inc. and Amazon.com Inc rose after reporting strong earnings late Thursday. In Europe, equities pared a third monthly gain.

"Overall, a soft report, but the Treasury market has sold off and we'll argue that the market was simply looking for an ever weaker report," BMO Capital Markets strategist Ian Lyngen wrote in research note after the US gross domestic product figures were released.

Bond traders also are looking at the Bureau of Labor Statistics employment cost index, which climbed 8 per cent in the first quarter, its largest gain since 2007 and a sign that wage growth is accelerating. This builds on data from Europe showing higher than expected price growth in April.

"The inflation data is more important than the miss in other components," Anthony Cronin, a trader in New York at Societe Generale SA, wrote in an email.

"It puts more pressure on the Fed and comes on the back of the strong European CPI print this morning."

In addition, markets are in a state of flux as President Donald Trump fights an uphill legislative battle to turn his words into action and is keeping concerns over North Korea alive. The administration's tax-cut plan and mixed signals on its view of Nafta stirred markets this week. The growth slowdown will cast doubt on the Federal Reserve's resolve to raise interest rates two more times this year.

Now, eyes turn to Congress, which on Friday voted to give itself another week to agree on a spending bill that will fund the government through September.

The S&P 500 Index closed down 0.19 per cent at 2,384.20, while the Dow Jones Industrial Average dropped 0.19 per cent to 20,940.51 and the Nasdaq 100 rose 0.22 per cent to 5,583.53. The small-cap Russell 200 Index sank 1.2 per cent to 1,400.41.

BLOOMBERG