U.S. stocks were little changed after data showed the U.S. economy's output grew at the slowest pace in three years during the first quarter.
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The S&P 500 rose 0.1%, while U.S. government bonds weakened slightly, sending yields higher, as data showed rising inflation despite lackluster economic growth. The Dow Jones Industrial Average edged down 8.4 points, or less than 0.1%, to 20973.
Gross domestic product rose 0.7% at a seasonally adjusted annual rate, the Commerce Department said, falling short of the 1% growth expected by economists surveyed by The Wall Street Journal. However, that exceeded the Federal Reserve Bank of Atlanta's widely-tracked GDPNow model, which on Thursday forecast 0.2% growth for the first quarter.
There were other positive signals in the data. U.S. wages and benefits rose at the fastest pace since 2007 during the first quarter, signaling a tightening labor market. The Fed's preferred inflation gauge also rose at a rate of 2.4% in the first quarter, its biggest jump since spring 2011.
The yield on the 10-year Treasury note was recently 2.318%, according to Tradeweb, up from 2.298% Thursday
Still, some analysts said they were concerned with the GDP number and what it could mean.
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"We need greater growth," said Kent Engelke, chief economic strategist at Capitol Securities Management. "Are we having inflation and slow growth and unfolding into a stagflation environment? I'm not saying we're there yet, but it is something to worry about because it could hurt corporate profits."
Corporate earnings in the first quarter are coming in better than expected. With 291 companies having reported, companies in the S&P 500 are on track to post a 12% rise in first-quarter earnings from the year prior, according to FactSet. That's above the first-quarter earnings growth of 9.1% that analysts estimated as of March 31.
On Friday, shares of Chevron and Exxon Mobil climbed after posting encouraging earnings results. Exxon's shares rose 1.2% after the oil and gas giant said its profit more than doubled in the first quarter, while Chevron's stock gained 1.3% after the No. 2 energy company in the U.S. swung to a profit in the first three months of the year.
Earlier, the euro and government bond yields jumped on surprisingly strong eurozone inflation figures. The Stoxx Europe 600 index slipped 0.2%.
Official figures showed the eurozone's core inflation rate -- which excludes volatile food and energy prices -- at 1.2%, the highest level since 2013. Analysts were expecting a rise of 1%.
The euro was recently up 0.4% against the dollar at $1.0918.
Despite the cooling in European stocks toward the end of the week, European equity funds recorded their strongest inflows in more than a year, according to EPFR Global data.
In the week to April 26, $2.4 billion entered European equity funds, which included the jump in equity prices -- particularly in the banking sector -- that came after the first round of the French presidential election. Those net flows are the strongest into European equities since December 2015.
"Europe is overweight financials, commodities and industrials relative to the U.S.," said David Stubbs, global market strategist at J.P. Morgan Asset Management.
"With stronger growth at home, a cyclical upswing globally, the euro competitive and trade recovering you should see an uptick -- this should be the year that earnings growth arrives," he added.
In Asia, Japan's Nikkei 225 index closed down 0.3%. Hong Kong's Hang Seng Index fell 0.3%. China's Shenzhen A-share index bucked the trend, rising 0.4%.
South Korea's Kospi closed 0.2% lower after President Donald Trump said he wanted to renegotiate a trade deal with the country, in an interview with Reuters.
--Ese Erheriene contributed to this article
Write to Mike Bird at Mike.Bird@wsj.com and Ese Erheriene at firstname.lastname@example.org
(END) Dow Jones Newswires
April 28, 2017 09:54 ET (13:54 GMT)