Wall St. opens lower as trade data suggests GDP contraction

(Reuters) - Wall Street opened lower on Tuesday after two sessions of gains after data showed that U.S. trade deficit rose in March, suggesting that economic growth contracted in the first quarter.

The deficit surged to its highest in nearly 6-1/2 years and the $51.4 billion gap was larger than the $45.2 billion deficit the government assumed in its snapshot of first-quarter gross domestic product last week.

A now-settled labor dispute at West Coast ports had significantly slowed trade at the start of the year. The dollar's surge has also weighed on trade and on corporate earnings reports.

About 68 percent of the S&P companies that have reported results so far, have reported earnings above analysts' estimates, above the 63 percent that typically beat in a quarter. However, only 44.4 percent have beaten on revenue, below the typical 61 percent.

"The dollar is clearly one factor in the lower revenue number," said Tom Donino, co-head of trading at First New York Securities in New York.

"The dollar has probably peaked in the short term and I think its going to be range bound through the summer."

At 9:52 a.m. EDT the Dow Jones industrial average <.DJI> was down 32.13 points, or 0.18 percent, at 18,038.27, the S&P 500 <.SPX> was down 5.69 points, or 0.27 percent, at 2,108.8 and the Nasdaq Composite <.IXIC> was down 34.00 points, or 0.68 percent, at 4,982.92.

A majority of the 10 S&P sectors were down, with utilities <.SPLRCU>, losing 0.8 percent and the tech index <.SPLRCT> down 0.7 percent.

However oil prices hit their highest this year, making energy stocks the biggest gainers on the major indexes.

Dow component Disney was flat after hitting a record high of $113.30 after it's quarterly revenue beat analysts' expectations.

Tesla gained 3.7 percent to $239.30 after Jefferies started coverage with a "buy" rating, saying investors worries about China sales are overblown.

Cosmetics maker Estee Lauder rose 5.3 percent to $87.86 after it reported better-than-expected profits.

Netflix was up 3.1 percent at $572.63 after BofA Merrill Lynch upgraded the stock to "buy", according to Theflyonthewall.com.

AcelRx Pharmaceuticals slumped 21.9 percent to $3.27 after the FDA rejected a meeting request to discuss the need for additional trial of its pain drug device.

News Corp and Groupon are scheduled to report after the close.

Declining issues outnumbered advancing ones on the NYSE by 1,453 to 1,278, for a 1.14-to-1 ratio on the downside; on the Nasdaq, 1,387 issues fell and 895 advanced for a 1.55-to-1 ratio favoring decliners.

The benchmark S&P 500 index was posting 12 new 52-week highs and no new lows; the Nasdaq Composite was recording 20 new highs and 17 new lows.

(Editing by Savio D'Souza)

WhatsAppFacebookTwitterLinkedinBeloudBluesky