The economy put on the brakes as the gross domestic product increased by only 0.5 percent, the weakest since the first quarter of 2014.
Economists had estimated the economy would expand at 0.7 percent for the first quarter. According to the U.S. Department of Commerce, spending on clothing and footwear in the first quarter dropped 2.1 percent. First-quarter spending on clothing and footwear was $359 billion, a drop from the fourth-quarter spending of $361 billion.
On a positive note, the jobs market continues to put up strong numbers. The four-week average of employment claims fell to 256,000 last week, a 42-year low.
The mixed news created a mixed reaction in the stock markets. The S&P 500 fell by 4 points to 2,090 and the Dow Jones Industrial average fell by 78 points to 17,962. A 10 percent pop in the shares of Facebook Inc. to $119 helped the Nasdaq add 14 points to trade at 4,877. The S&P Retail ETF declined by 47 cents to $45.32.
Related Galleries
Cabela’s Incorporated was rising by 76 cents to trade at $52.95 after reporting solid first-quarter results. Thanks to strength in its financial services business, Cabela’s Inc. posted total revenue that rose 4.5 percent while net income — on an adjusted basis — gained 7.3 percent. Same-store and online sales both declined while apparel gross margins were eroded by markdowns. The earnings per share of 43 cents beat analyst estimates of 37 cents per share.
Hanesbrands Inc. is popping over 9 percent after announcing it was acquiring Australian underwear firm Pacific Brands for $835 million. It was a 22 percent premium to the company’s closing price on Wednesday. It is the sixth takeover in three years for Hanesbrands. Pacific owns Australia’s biggest underwear brand, Bonds that was originally founded by an American.
Delta Apparel Inc. announced preliminary fiscal second-quarter results before the market opened on Thursday. The earnings per diluted share are expected to be in the range of 40 to 43 cents. The consensus was 33 cents per share. This compares to last year’s 3 cents per share for the same period, after adjusting for the 43 cents per share gain on the sale of The Game business. The stock fell by 40 cents to trade at $19.90.