Nasdaq falls 1%; Salesforce shares weigh on tech By Reuters

By Abigail Summerville

(Reuters) -U.S. stocks fell on Thursday, led by declines in technology shares after a disappointing Salesforce (NYSE:) forecast, while investors digested data showing the economy had grown slower than previously expected in the first quarter.

Salesforce shares plunged, a day after the company forecast second-quarter profit and revenue below Street estimates due to weak client spending on its cloud and enterprise business products.

The technology sector dropped and was the biggest drag on the benchmark index.

A Commerce Department report showed the economy grew slower in the first quarter than previously estimated, after downward revisions to consumer and equipment spending and a key measure of inflation ticked lower, ahead of Friday’s personal consumption expenditure report for April.

Another set of numbers showed weekly jobless claims rose more than expected.

„Normally you’d expect the market to rally off of a downward revision to GDP because it signals the economy is moderating, the Fed’s job is done, we can get rate cuts. That’s not the reaction we’re getting today,” said Mark Hackett, chief of investment research at Nationwide.

„So I’m a little surprised but not that surprised simply because after the six week (rally) that we’ve had, it’s pretty healthy and expected to see some consolidation or sideways move for a while.”

According to preliminary data, the S&P 500 lost 30.78 points, or 0.58%, to end at 5,236.17 points, while the Nasdaq Composite lost 185.32 points, or 1.10%, to 16,735.26. The Dow Jones Industrial Average fell 332.51 points, or 0.86%, to 38,109.03.

U.S. Treasury yields dipped following the data, while chances for an at least 25-basis-point interest rate reduction in September edged up to 50.4%, from 48.7% before the data, according to the CME Group’s (NASDAQ:) FedWatch Tool. Bond yields had hit multi-week highs earlier in the week.

Among the day’s gainers, HP (NYSE:) jumped after it posted better-than-expected second-quarter revenue.

Tesla (NASDAQ:) rose after Reuters reported the company was preparing to register its 'Full Self-Driving’ software in China.

Retailer Best Buy (NYSE:) shares shot up after beating forecasts for quarterly profit, while department-store chain Kohl’s (NYSE:) slumped after cutting its annual sales and profit forecasts.

Dell Technologies (NYSE:) shares were lower. Its quarterly results were expected after the close, along with results from Nordstrom (NYSE:) and Costco (NASDAQ:).