Stocks Close Lower on Weak GDP Report

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Stocks sank Thursday after a report showed the economy grew at its slowest pace in two years during the first quarter, raising more questions about the strength of the economy, and oil rebounded late in the session.


The Dow Jones Industrial Average finished down 128.43 points, or 1.3 percent, at 10,070.37. The Standard & Poor’s 500 Index was down 13.16 points, or 1.1 percent, to close at 1,143.22. The Nasdaq Composite Index was down 26.25 points, or 1.4 percent, at 1,904.18.


The U.S. economy grew at a 3.1 percent annual rate of expansion as consumers and businesses curbed spending in the face of rising prices, the Commerce Department said. The expansion was the weakest since a 1.9 percent pace during the first quarter of 2003 and was an unexpected slowdown from the 3.8 percent rate registered in the fourth quarter of 2004.


And a late rebound in oil prices contributed to the market extending its losses at the end of the session. June crude futures rose 16 cents to settle at $51.77 a barrel, edging up from an earlier slide below $50.


Among local companies, shares of Center Financial Corp. rose 5 percent to close at $19.58 after the L.A.-based financial holding company of Center Bank reported net income of $5.7 million (34 cents per diluted share) for the first quarter ended March 31, compared with $3.3 million (20 cents) for the like period a year earlier.


And Foothill Independent Bancorp gained 2.5 percent to $25 after the Glendora-based holding company for Foothill Independent Bank said that its board of directors approved a 5-for-4 stock and a 25 percent increase in its stock dividend. Because of the split, however, the value of the dividend will remain at 13 cents a share, payable on June 10 to shareholders of record as of May 26.


On the down side, shares of Intermix Media Inc. lost 17.3 percent to close at $3.97 after the L.A.-based firm was sued by New York Attorney General Eliot Spitzer on charges the company used “spyware” and “adware” that secretly installed pop-up ads on screens that slow and crash personal computers. Intermix released a statement saying it “does not promote or condone spyware and remains committed to putting this legacy issue behind it as soon as [is] practicable.”


And Skechers USA Inc. fell 12.8 percent to $12.15 after the Manhattan Beach-based footwear company matched analysts’ average estimates. It reported, after Wednesday’s market close, net income of $10.3 million (25 cents per diluted share) for the first quarter ended March 31, up from $7 million (18 cents) for the like period a year earlier.

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