*
U.S. consumer sentiment drops to six-month low in May
*
News Corp beats quarterly profit estimates
*
Indexes: Dow up 0.10%, S&P flat, Nasdaq down 0.19%
(Updates prices to open, adds details on Tesla, News Corp,
consumer sentiment data, weekly index milestones)
By Shreyashi Sanyal and Shristi Achar A
May 12 (Reuters) - Wall Street's main indexes struggled
to gain on Friday as U.S. consumer sentiment slumped to a
six-month low, indicating the rapid interest rate hikes were
starting to hurt economic growth, while Tesla shares shed their
initial gains.
Consumer sentiment in May dropped to its lowest reading
since last November as a standoff to raise the federal
government's borrowing cap fanned worries about the economy's
outlook.
Markets have been watching for signs of a breakthrough in
raising the U.S. government's $31.4 trillion debt ceiling to
avoid a catastrophic default.
A meeting between President Joe Biden and top lawmakers that
was scheduled for Friday has been postponed and the leaders
agreed to meet early next week.
"If the consumer turns negative, if inflation has finally gotten to the point where consumers can't spend, they've got concerns about their job outlook, that is yet another headwind," said Steve Wyett, chief investment strategist at BOK Financial. Earlier in the week, both consumer and producer prices cooled a bit, while weekly jobless claims posted their sharpest rise in 1-1/2-years, but at a pace that helped boost the bets of a pause in the Fed's rate hikes.
The indexes rose at the opening bell on gains in Tesla Inc following news top boss Elon Musk said he found a new chief executive for Twitter. But they soon reversed gains to fall 0.3%.
Linda Yaccarino, who exited from the role of head of advertising at NBCUniversal, was reported to be in talks to become the new Twitter CEO.
The KBW Regional Banking index looked set to extend declines to a fifth straight session, trading about 1% lower on concerns over the sector's health following the collapse of three regional lenders.
At 10:27 a.m. ET the Dow Jones Industrial Average was up 34.97 points, or 0.10%, at 33,344.48, the S&P 500 was up 0.01 points, or 0.00%, at 4,130.63 and the Nasdaq Composite was down 23.22 points, or 0.19%, at 12,305.29.
For the week, the Dow is set to decline 0.9%, while the S&P 500 is on course to end nearly flat. However, the Nasdaq is likely to see gains of 0.6%.
First Solar Inc shares jumped 22.9%, gaining the most on the S&P 500, after the solar panel maker acquired Sweden's thin-film solar cell technology firm Evolar AB. News Corp gained 7% after the media conglomerate beat Wall Street estimates for third-quarter profit.
Data showed U.S. import prices increased in April for the
first time since late 2022 amid higher fuel costs, but imported
inflation pressures remained subdued.
Advancing issues outnumbered decliners by a 1.29-to-1 ratio
on the NYSE and for a 1.26-to-1 ratio on the Nasdaq.
The S&P index recorded 18 new 52-week highs and six new
lows, while the Nasdaq recorded 43 new highs and 111 new lows.
(Reporting by Shreyashi Sanyal and Shristi Achar A in
Bengaluru; Editing by Saumyadeb Chakrabarty and Arun Koyyur)
