*

US first-quarter economic growth revised lower

*

Dollar General beats Q1 sales estimates, shares rise

*

Tesla up after report on push to roll out advanced FSD in

China

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Indexes down: Dow 0.93%, S&P 0.26%, Nasdaq 0.24%

(Updated at 9:56 am ET/1356 GMT)

By Johann M Cherian and Lisa Pauline Mattackal

May 30 (Reuters) -

U.S. stock indexes fell on Thursday, with a plunge in

Salesforce ( CRM ) dragging on the Dow, while data showing the economy

grew slower than previously expected in the first quarter

supported bets of interest-rate cuts from the Federal Reserve

this year.

Salesforce ( CRM ) was the biggest weight on the Dow,

nosediving 20% after it forecast second-quarter profit and

revenue below Street estimates due to weak client spending on

its cloud and enterprise business products.

U.S. gross domestic product growth for the first quarter

was lowered to 1.3%, versus a previously estimated 1.6%

expansion, primarily due to downward revisions to consumer

spending, the

Commerce Department reported

.

Ahead of Friday's personal consumption expenditure

report for April - the Fed's preferred inflation gauge -

first-quarter growth in the core Personal Consumption

Expenditures Price Index was revised down to 3.6% from 3.7%.

Weekly

jobless claims

also rose more than expected.

U.S. Treasury yields dipped following the report, while

chances for an at least 25-basis-point interest rate reduction

in September edged up to nearly 52%, from 48.7% before the data,

according to the CME Group's FedWatch Tool.

"Less economic growth isn't necessarily all that

negative because we're still in a growth pattern, and the good

news is that inflation measured by the PCE was revised down...

that will help alleviate pressures in the bond market and could

cause stocks to stabilize," said Peter Cardillo, chief market

economist at Spartan Capital Securities.

Uncertainty over monetary policy, combined with heavy

new Treasury issuance, has pushed bond yields higher and

pressured stocks.

Traders now await remarks from New York Fed President

John Williams and Dallas Fed President Lorie Logan later in the

day.

The benchmark S&P 500 Index fell to its lowest in

two weeks, while the blue-chip Dow dropped to a one-month

low.

However, small-cap stocks regained some ground, with the

Russell 2000 Index rising

0.7

% after the previous session's 1.5% drop.

At 9:56 a.m. ET, the Dow Jones Industrial Average

was down 356.36 points, or 0.93%, at 38,085.18, the S&P 500

was down 13.80 points, or 0.26%, at 5,253.15, and the

Nasdaq Composite was down 40.29 points, or 0.24%, at

16,880.29.

Tesla gained

2.7

% after Reuters reported the company was preparing to

register its

'Full Self-Driving' software

in China.

Retailer American Eagle Outfitters ( AEO ) dropped 6.5%,

posting downbeat quarterly revenue as sticky inflation hurt

demand for its apparel and accessories, often sold full-price.

Department-store chain Kohl's slumped

25.2

% after cutting its annual sales and profit forecasts.

Best Buy ( BBY ) and HP were the top S&P 500

gainers. Best Buy ( BBY ) jumped 11.7% after beating forecasts for

quarterly profit and predicting higher laptop sales, while HP

gained 12.4% after it posted better-than-expected

second-quarter revenue.

Advancing issues outnumbered decliners by a 2.83-to-1

ratio on the NYSE

and

by a 1.82-to-1 ratio on the Nasdaq

.

The S&P index recorded seven new 52-week highs and eight

new lows, while the Nasdaq recorded

27

new highs and

36

new lows.