U.S. stocks closed lower on the day and mixed for the second quarter Friday, pressured by the latest Chicago purchasing managers’ monthly report that suggested a worst-case scenario of economic slowing alongside higher prices.
But shares of General Motors rose 8.5 percent on news that investor Kirk Kerkorian is urging the automaker to consider an alliance with foreign rivals Renault SA and Nissan Motor Co.
The Dow Jones industrial average closed down 40.58 points at 11,150.22. The Dow posted a 0.4 percent gain for the quarter.
The S&P 500 and the Nasdaq Composite closed down 2.67 points at 1,270.20 and down 2.29 points at 2,172.09, respectively.
The S&P 500 and the Nasdaq both broke strings of four straight quarterly gains, falling 1.9 percent and 7.2 percent, respectively, the first quarterly losses since the first quarter of 2005.
There were more than 2.37 billion shares traded on the New York Stock Exchange, where rising shares outnumbered losers 11 to 5. In the Nasdaq market, more than 2.58 billion shares traded, with nine stocks gaining in price for every six trending lower.
Stocks opened higher as portfolio managers rounded out their second-quarter portfolios amid relief that two years of U.S. rate increases could be reaching an end. Stocks often rally on the final day of a quarter, as fund managers finagle to make their portfolios finish the period with gains.
However, gains evaporated after the weak regional manufacturing report from Chicago. A number of early exits by traders ahead of the Fourth of July holiday also drained the market of momentum.
On Thursday, stocks staged a major rally, after the Federal Reserve instilled hope that its two-year program of rate increases will wrap up soon. A monetary-policy statement from the central bank made clear that “any additional firming that may be needed” will depend on the economic outlook. Prior statements had employed a tougher, more hawkish, choice of words.
The Fed on Thursday also put in place its 17th consecutive quarter-point rate hike since June 2004, lifting the overnight rate to 5.25 percent.
The Fed’s emphasis on economic strength kept investors focused on Friday’s data reports.
The National Association of Purchasing Managers’ Chicago group said its index of regional business activity slowed to 56.5 percent this month from 61.5 percent in May. The result came in below a MarketWatch forecast of 59.4 percent.
Consumer prices increased 0.4 percent in May. Core prices – which strip out food and energy costs – increased 0.2 percent in May for a second month. The results were close to the forecasts of economists polled by MarketWatch.
