US Stock Futures Trim Gains After GDP





U.S. stock futures trimmed their modest gains Friday after first-quarter gross domestic product grew slightly less than expected and U.S. labor costs rose incrementally.

After the report, Dow Jones Industrial Average futures were up 5, while Standard & Poor's 500-share index futures rose less than one point and Nasdaq Composite futures edged up two points. Prior to the data, Dow futures had been up 17, while S&P futures climbed 2 and Nasdaq futures advanced 4.

The Dow is on track to close up for the third month in a row, despite some turbulent days when instability in Greece and news of the fraud charges against Goldman Sachs roiled markets. The measure has gained over 12 of the last 14 months.

The Commerce Department said Friday that the U.S. first-quarter GDP rose at a 3.2% annual rate January through March, slightly below the 3.3% growth expected by economists surveyed by Dow Jones. But encouragingly, the growth was driven by businesses stocking up on goods for a strengthening consumer demand stoked by the lowest core inflation number in 51 years.

Meanwhile, the employment cost index rose 0.6% in the first quarter of 2010, the Labor Department said in a report Friday. Wages and salaries grew 0.4%. Economists had expected the employment cost index would climb by 0.4%.

Indications of the global economic recovery were bleaker. Spain's jobless rate rose to over 20% in the first quarter as the euro-zone jobless rate held at 10% in March.

The euro strengthened against the dollar after Greece agreed with the International Monetary Fund and the European Union to take additional austerity measures expected to yield "around EUR23 billion" ($30 billion) as a precondition for financial assistance, a Greek official familiar with the talks on aid said.

Two weeks after the Securities and Exchange Commission filed civil fraud charges against Goldman Sachs Group, federal prosecutors in the Manhattan U.S. Attorney's Office launched their own criminal investigation into whether the company or its employees committed securities fraud in connection with its mortgage trading, sending Goldman Sachs shares down 4.3%, in premarket trading.

American depositary shares of Barclays PLC dropped 6% in premarket trades after the U.K. bank reported a 29% profit rise that disappointed analysts, particularly as the group's fixed income division didn't match some peers.

Energy giant BP PLC rose 1.1% while Transocean fell 2.6% in early premarket action, following their steep losses as analysts debate the costs from the oil spill in the Gulf of Mexico. BP's market capitalization has dropped by around $25 billion since a rig fire was announced.

On Friday the oil spill reached the Louisiana coast.

The White House indicated Friday that new domestic offshore oil drilling will be on hold until the investigation of the Gulf of Mexico disaster is complete.