Stocks solidly lower after US reports that the economy contracted in the first quarter

Markets Associated Press

U.S. stocks sank in late-morning trading Friday, following a disappointing government report that showed the U.S. economy contracted in the first three months of the year.

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The revised data, published early Friday, showed that U.S. gross domestic product contracted 0.7 percent in the first quarter. That was worse than the government's initial estimate of growth of 0.2 percent in the period.

KEEPING SCORE: The Dow Jones industrial average lost 135 points, or 0.7 percent, to 17,992 as of 11:21 a.m. Eastern. The Standard & Poor's 500 index lost 13 points, or 0.6 percent, to 2,107 and the Nasdaq composite lost 35 points, or 0.7 percent, to 5,063.

OTHER BAD DATA: Investors also had two other disappointing pieces of economic news to work through. A Chicago manufacturing survey fell to a reading of 46.2, well below the reading of 53 that economists were hoping for. Also a report on consumer sentiment for May fell to a six-month low.

GREEK CONFUSION: Though Greek Prime Minister Alexis Tsipras has said a deal with creditors could be ready by the weekend, others are less confident.

Christine Lagarde, the head of the International Monetary Fund, said a Greek exit from the euro remains a possibility, while German Finance Minister Wolfgang Schaeuble, appeared less certain in comments following the end of a meeting of top finance officials in Berlin. Without a deal for remaining bailout cash soon, Greece faces going bankrupt and ditching the euro. Figures from the European Central Bank showing Greek bank deposits at their lowest in more than a decade only added to the prevailing gloom.

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ANALYST TAKE: "It's the last trading day before the end of May deadline for Greece, and traders are not takings any chances," said David Madden, market analyst at IG. "Until we have some clarity about a deal being struck, dealers will always fear for the worst."

LET'S PLAY: GameStop rose $3.12, or 7.5 percent, to $44.07. The video game retailer posted results that exceeded analysts' estimates, helped by the sale of recently released video game titles.

ENERGY: Benchmark crude rose as U.S. supplies declined more than expected. The futures contract was up $1.80 to $59.49 a barrel on the New York Mercantile Exchange. Brent crude rose $2.17 to $64.75 a barrel in London.

BONDS, CURRENCIES: U.S. government bond prices rose. The yield on the 10-year Treasury note fell to 2.11 percent. The euro rose to $1.0997 to the dollar, while the dollar rose to 123.83 yen against the Japanese currency.