- US first quarter GDP revised sharply lower
- Airbase north of Baghdad comes under attack
- Monsanto approves $10bn share repurchase plan
Dow Jones Industrials: 0.18%
Nasdaq Composite: 0.08%
S&P 500: 0.10%
US stocks moved into the blue after tripping just at the start of trading as investors overcame the initial negative reaction to a much larger than expected downwards revision to estimates of gross domestic product (GDP) growth for the first quarter.
According to revised estimates from the Commerce Department US GDP contracted at a 2.9% annualised pace during the first three months of the year versus the previously estimated drop of 1%. Economists had been expecting a smaller revision to reveal a drop of 1.7%.
The Commerce Department had previously calculated that weak consumer spending - as a result of poor weather - had been offset by a surge in outlays on healthcare services as the previously uninsured looked to make the most of their new Medicaid/private coverage. That is no longer thought to have been the case. Thus, consumer spending grew at a 1% pace instead of the 3.1% clip which had been pencilled in.
It was the biggest downward revision to the Commerce Department's second GDP estimate since records began in 1976.
Acting as a backdrop, Sunni militants and Iraqi government forces continued to clash over the Baiji refinery 200km north of Baghdad. On top of that, a large airbase 90 kilometres north of the capital came under attack.
In other economic data, durable goods orders unexpectedly declined by 1% in May, after a revised 0.8% increase the month before. Core capital goods orders on the other hand were 0.7% higher on the month.
Markit's US service sector purchasing managers' index for the month of June advanced to a reading of 61.2 from 58.1 in the month before (consensus: 58).
Monsanto approves $10bn share buyback programme
Monsanto is an early gainer following the announcement of a $10bn share repurchase plan.
Shares in bookstore chain Barnes & Noble climbed in pre-market trade after the company reported narrower quarterly losses and said it would split its retail and Nook media business into two separate companies.
General Mills was lower after the packaged food group said it would embark on a new cost-cutting plan as it disappointed with fourth-quarter results.
Crude futures holding lower
West Texas Intermediate futures were lower by 0.33% at $105.69 a barrel on the NYMEX.
The yield on a 10-year US Treasury was down three basis points at 2.54%.