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1st LD Writethru: U.S. stocks extend losses on downbeat GDP data

Xinhua, May 30, 2015 Adjust font size:

U.S. stocks declined in volatile trading on Friday, as the second estimate of U.S. first-quarter gross domestic product (GDP) came out negative.

The Dow Jones Industrial Average dropped 115.44 points, or 0.64 percent, to 18,010.68. The S&P 500 fell 13.40 points, or 0.63 percent, to 2,107.39. The Nasdaq Composite Index was down 27.95 points, or 0.55 percent, to 5,070.03.

U.S. Commerce Department announced Friday that the second estimate of real GDP decreased at an annual rate of 0.7 percent in the first quarter of 2015, in contrast to the initial estimate of a 0.2 percent expansion announced last month.

The decrease in real GDP in the first quarter primarily reflected negative contributions from exports, nonresidential fixed investment, and state and local government spending that were partly offset by positive contributions from personal consumption expenditures, private inventory investment, and residential fixed investment, according to the Commerce Department.

The bitterly cold winter weather is blamed for pummeling personal consumption and private inventory investment, dragging down growth to the negative territory.

"Demand collapsed in the first quarter. Not only was GDP down 0. 7 percent, final sales fell 1.1 percent. The strong dollar and weak overseas demand have caused exports to drop two quarters in a row while imports continue to grow," said Chris Low, chief economist at FTN Financial, in a note.

Lack of resolution on Greece debt talks weighed on Wall Street sentiment as well. International Monetary Fund Chief Christine Lagarde told a German newspaper that a Greek exit is a possibility, and that it would "probably not" mean the end of the euro.

European shares suffered big losses as Greek fears grew on Friday, with the French benchmark index CAC 40 decreasing 2.53 percent.

In Asia, Chinese Shanghai Composite Index ended mildly lower in volatile trading following Thursday's heavy sell-off, while Japan' s benchmark Nikkei index edged up 0.06 percent on optimism over performance of domestic companies, logging an 11-day winning streak.

In a weekly basis, the blue-chip Dow dipped 1.2 percent, and the broader S&P 500 decreased 0.9 percent, while the tech-heavy Nasdaq moved down 0.4 percent. Endite