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U.S. stocks slide as economic growth disappoints, tech weakens

🕐 4 min read

NEW YORK (AP) — U.S. stocks are slipping Thursday afternoon after the U.S. government said the economy didn’t grow as much as expected in the first three months of this year. Apple is pulling technology companies lower, and consumer companies are also losing ground.

KEEPING SCORE: The Dow Jones industrial average lost 105 points, or 0.6 percent, to 17,936 as of 2:45 p.m. Eastern time. The Standard & Poor’s 500 index was down 5 points, or 0.2 percent, to 2,090. The Nasdaq composite fell 12 points, or 0.2 percent, to 4,851 and is on pace to fall for the sixth day in a row.

ECONOMY SLOWS: The U.S. economy grew a bit less than expected in the first quarter. The government said gross domestic product increased just 0.5 percent as consumer spending slowed down, exports kept falling, and business investment plunged. That’s the weakest result in two years, but experts think the economy will bounce back in the current quarter.

TECH TURMOIL: Tech stocks traded lower. Apple fell $1.59, or 1.6 percent, to $96.23 after investor Carl Icahn said he’d sold his stake in the company. Earlier in the day, tech stocks were higher after strong results from Facebook and other companies. The social network’s stock reached an all-time high after first-quarter profit nearly tripled, while its revenue was also better than expected. The stock climbed $8.82, or 8.1 percent, to $117.71.

DEALS, DEALS, DEALS: Most of the day’s big deals were in health care. In the largest, medical device maker Abbott Laboratories said it will buy St. Jude Medical for $19.3 billion, combining Abbott’s heart devices, heart valve products and infant formula business with St. Jude’s heart failure and heart rhythm device products.

The deal valued St. Jude stock at $46.75 per share, and it rocketed 16.64, or 26.9 percent, to $78.59 while Abbott fell $2.71, or 6.2 percent, to $41.12.

French drugmaker Sanofi went public with an offer to buy cancer drug maker Medivation for $9.3 billion, or $52.50 per share. Medivation, the maker of the prostate cancer medication Xtandi, added $4.80, or 9.2 percent, to $56.85.

Drugmaker AbbVie said it will buy privately-held Stemcentrx for $5.8 billion. Stemcentrx is developing a drug that uses stem cells to treat small cell lung cancer. AbbVie stock rose$1.40, or 2.3 percent, to $62.10.

DREAM COME TRUE: Comcast’s NBCUniversal unit will buy DreamWorks Animation, the movie studio behind the “Kung Fu Panda” and “How to Train Your Dragon” franchises, for $3.55 billion. The deal values DreamWorks at $41 a share, and the stock, which jumped 19 percent Wednesday, rose another $7.76, or 24.1 percent, to $39.96.

EXPANDING WAISTLINE: Hanesbrands, a maker of underwear, t-shirts and socks, said it will buy the biggest maker of underwear in Australia. The company said its offer values Pacific Brands Ltd. at $800 million. Hanesbrands has also made a series of deals to give it more control of the Champion brand overseas. The stock jumped $2.19, or 7.9 percent, to $29.98.

GNC-YA: Nutritional supplement company GNC Holdings plunged after it reported weak first-quarter results, including lower vitamin sales. The company also said it will sell 84 stores to a franchise operator. GNC stock lost $10.32, or 29 percent, to $25.28.

NOT IN HARMAN-Y: Harman International, which makes automotive electronics and audio equipment, reported first-quarter results that didn’t meet analyst projections. The company also cut its forecasts for the rest of the year. Harman said revenue from a business that makes equipment for restaurants, sports arenas and other businesses fell. Its stock dropped $11.46, or 12.9 percent, to $77.44.

TRIP CANCELED: Online travel booking company Priceline slipped after its CEO resigned. The company said Darren Huston violated its code of conduct by having a personal relationship with an employee. He had led the company since January 2014. Chairman and former CEO Jeffrey Boyd will be its interim CEO while it looks for a permanent replacement for Huston. The stock lost $16.94, or 1.3 percent, to $1,336.80.

OVERSEAS: European stock indexes were mixed. Germany’s DAX was 0.2 percent higher while the CAC 40 in France and the FTSE 100 index in Britain were little changed. Asian stocks mostly fell as investors were disappointed by the Bank of Japan’s decision not to add to its huge economic stimulus program. That surprised investors, and the Japanese yen continued to get stronger. The dollar sank to 108.12 yen from 111.34 yen. The Nikkei 225, Japan’s main stock index, tumbled 3.6 percent.

South Korea’s Kospi shed 0.7 percent and Hong Kong’s Hang Seng index eked out a 0.1 percent gain.

ENERGY: Benchmark U.S. crude oil, which is at its highest prices in almost six months, rose 70 cents, or 1.5 percent, to $46.03 a barrel in New York. Brent crude, the international standard, picked up 96 cents, or 2 percent, to $48.14 a barrel in London.

OTHER ENERGY TRADING: Wholesale gasoline rose 2 cents to $1.60 a gallon. Heating oil rose 3 cents to $1.41 a gallon. Natural gas fell 4 cents to $2 per 1,000 cubic feet.

METALS: Gold gained $16, or 1.3 percent, to $1,266.40 an ounce. Silver jumped 26 cents, or 1.5 percent, to $17.55 an ounce. Copper rose 1 cent to $2.22 a pound.

BONDS, CURRENCIES: Bond prices held steady after a big gain on Wednesday. The yield on the 10-year U.S. Treasury note remained at 1.85 percent. The euro rose to $1.1348 from $1.1323.

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