* Q1 GDP data shows economy contracted
* Consumer sentiment fell in May
* Intel biggest boost to Dow, S&P
* United Rental falls after BofA downgrade
* Indexes down: Dow 0.58 pct, S&P 0.47 pct, Nasdaq 0.43 pct (Adds quote, updates prices)
By Sweta Singh
May 29 (Reuters) - U.S. stocks extended their losses in late morning trading on Friday after weak GDP and consumer sentiment data added to investor concerns about the strength of the economy.
The latest data showed the economy contracted at a 0.7 percent annual rate in the first quarter, a sharp turnaround from an earlier estimate of a 0.2 percent growth pace issued last month.
Economists had expected GDP would be revised to show a contraction of 0.8 percent.
Consumer sentiment fell in May, a survey by the University of Michigan showed, while the Institute for Supply Management-Chicago Business Barometer unexpectedly fell in May.
“The data is telling us that the economy is improving but it is not super strong,” said Kim Forrest, a senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
“We are looking at the first half of 2015, which is probably not as strong as investors would have liked. So that adds to today’s lackluster market action.”
Investors keep a keen eye on economic data for cues to help narrow down the timing of an increase in interest rates by the Federal Reserve.
“Today’s market action says the rate increase is going to happen in September,” Forrest added.
The GDP report also showed that corporate profits declined 8.7 percent, the largest drop in a year and the second straight quarterly fall.
Greece’s ability to strike a deal with its euro zone partners by Sunday also weighed on global markets.
A euro zone official said Greece will not be able to get the money still available under its current bailout plan if it does not agree to the outline of a reforms-for-cash deal with creditors by the end of next week.
At 11:47 a.m. ET (1547 GMT) the Dow Jones industrial average was down 105.81 points, or 0.58 percent, at 18,020.31, the S&P 500 was down 10.03 points, or 0.47 percent, at 2,110.76 and the Nasdaq Composite was down 22.08 points, or 0.43 percent, at 5,075.89.
All 10 major S&P 500 sectors were down, with the industrial sector’s 1.15 percent drop being the steepest.
United Rental fell 6.5 percent to $88.85 after Bank of America Merrill Lynch downgraded the equipment rental company’s stock to “underperform” from “neutral”.
Intel rose 1.5 percent to $34.52 and gave the biggest boost to the Dow and the S&P on a New York Post report that it was close to buying Altera for about $15 billion.
Altera rose as much as 6.1 percent to a more than 15-year high of $50.10.
Rosetta Stone rose 20 percent to $19.90 after the education technology company said its board received an expression of interest.
GameStop was the biggest gainer on the S&P 500 index , up 8 percent at $44.10, after the company reported better-than-expected results.
Heron Therapeutics jumped as much as 52 percent to a 5-year high of $18.80 after its nausea drug met the main goal in a late-stage trial.
Decliners issues outnumbered advancers on the NYSE by 2,129 to 770, for a 2.76-to-1 ratio on the downside. On the Nasdaq, 1,735 issues fell and 857 advanced for a 2.02-to-1 ratio favoring decliners.
The S&P 500 index showed nine new 52-week highs and seven new lows, while the Nasdaq recorded 51 new highs and 23 new lows. (Additional reporting by Sayantani Ghosh in Bengaluru; Editing by Savio D‘Souza)