US stocks mixed after financial reform bill, GDP data

US stocks closed mixed in choppy trade Friday as investors digested a major financial reform bill and a downward revision to first-quarter economic growth.

The Dow Jones Industrial Average fell 8.99 points (0.09 percent) to 10,143.81, extending Thursday's sharp losses.

The tech-rich Nasdaq index gained 6.06 points (0.27 percent) at 2,223.48 and the broad-market S&P 500 index advanced 2.90 points (0.27 percent) to 1,076.59.

"Traders seem to be relieved that we have some clarity on financial reform, but are at the same time trying to determine what impact the changes will have on the financial markets," Charles Schwab & Co. analysts said in a note to clients.

The financial reform legislation forged by negotiators from the House of Representatives and the Senate early Friday "sets the stage for the most sweeping regulatory overhaul of the US financial industry in decades," Briefing.com analysts said in a note to clients.

They noted that the so-called "Volcker rule," which is aimed at banning banks from proprietary trading, "was softened by Senate negotiators" in the final legislation.

The bill heads to votes by both chambers in the Democratic-controlled Congress before going to President Barack Obama for signing.

"We are poised to pass the toughest financial reform since the ones we created in the aftermath of the Great Depression," Obama said at the White House before leaving for international summits in Canada.

On the economic front, the Commerce Department revised lower its estimate of first-quarter growth in gross domestic product, a broad measure of the country's output, to 2.7 percent.

The third and final estimate was the second downward revision of GDP growth for the January-March period, which had been initially calculated at 3.2 percent before being adjusted down to 3.0 percent in late May. The financial reform bill offered a bit of support to a cautious market.

"At this point, the fact that a bill appears to be on the verge of passage should lift the veil of uncertainty hanging over the financial industry," said Frederic Dickson, chief market strategist at DA Davidson & Co. Dow component Bank of America added 2.66 percent at 15.42 dollars and JPMorgan Chase surged 3.71 percent to 38.44 dollars.

Goldman Sachs climbed 3.47 percent to 139.66 dollars, Morgan Stanley gained 3.09 percent at 25.01 dollars, Citigroup put on 4.23 percent at 3.94 dollars and Wells Fargo rose 0.71 percent to 27.05 dollars. In the tech space, investors welcomed better-than-expected earnings from Accenture, up 7.99 percent at 40.55 dollars, and Oracle, 1.98 percent higher at 22.66 dollars. Research in Motion, the Canadian maker of the BlackBerry smartphone, plummeted 10.84 percent to 52.19 dollars after reporting sales that disappointed. Shares in British oil firm BP that are traded in New York shed 5.98 percent at 27.02 dollars.

The company's stock dropped to an intraday low on the London Stock Exchange last seen in August 1996 as investors worried about the spiraling costs of its Gulf of Mexico oil spill.

The Wall Street action came after the major indices nose-dived on Thursday amid concerns the recovery was faltering, leaving the Dow down 1.41 percent.

Bond prices edged higher. The yield on the 30-year Treasury bond fell to 3.113 percent from 3.123 percent on Thursday while that of the 30-year bond decreased to 4.071 percent from 4.088 percent. Bond prices and yields move in opposite directions.

AFP