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Wall Street opens lower as data shows slowing economic growth

Posted by: Admin | Posted on: April 29th, 2015 | 0 Comments


(Reuters) – U.S. stocks fell at the open on Wednesday after data showed that economic growth braked more sharply than expected in the first quarter, and ahead of the U.S. Federal Reserve’s likely move to maintain interest rates.

U.S. gross domestic product grew at only 0.2 percent annual rate in the quarter as harsh weather dampened consumer spending and energy companies struggling with low prices cut spending.

The reading was the weakest in a year and was lower than the 1.0 percent rate forecast by economists polled by Reuters.

Investors will closely examine the Fed’s statement for clues on when rates are likely to be increased, as a batch of soft data could push back the timing of a hike until the end of the year. The statement is expected at 1400 p.m. EDT (1800 GMT).

“The mixed economic data has been a concern. The low-rate environment is a bubble in itself and its like riding a balloon until the pin pops,” said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey.

At 9:59 a.m. EDT (1359 GMT) the Dow Jones industrial average .DJI was down 49.22 points, or 0.27 percent, at 18,060.92, the SP 500 .SPX was down 4.86 points, or 0.23 percent, at 2,109.9 and the Nasdaq Composite .IXIC was down 10.41 points, or 0.21 percent, at 5,045.01.

A number of companies also posted mixed earnings.

Twitter (TWTR.N) shares were down 4 percent at $40.64 in early trading, a day after the company cut its full-year forecast due to weak demand for its new direct response advertising.

MasterCard (MA.N) rose 2.6 percent to $92.63 after reporting a better-than-expected profit as costs fell and people spent more on its cards. The results also boost Visa (V.N) 1.7 percent to $67.95, making it the biggest boost to the Dow Jones Industrial average.

Lumber Liquidators (LL.N) slumped 16.7 percent to $27.81 after the hardwood flooring retailer said the U.S. Department of Justice is seeking criminal charges related to the import of certain wood flooring products from China.

Starwood Hotels (HOT.N) rose 8.6 percent to touch a record high of $87.88 after it said it was exploring strategic and financial alternatives.

GrubHub (GRUB.N) declined 8 percent to $41.56 after the online food delivery company’s profit missed market estimates due to a spike in expenses and taxes.

Goodyear (GT.O), the largest U.S. tire maker, rose 5.4 percent to $28.63 after reporting a better-than-expected quarterly profit as it offset the effects of a stronger dollar by managing costs.

Declining issues outnumbered advancing ones on the NYSE by 2,094 to 693, for a 3.02-to-1 ratio on the downside; on the Nasdaq, 1,526 issues fell and 842 advanced for a 1.81-to-1 ratio favoring decliners.

The benchmark SP 500 index was posting 9 new 52-week highs and 1 new lows; the Nasdaq Composite was recording 25 new highs and 27 new lows.

(Editing by Savio D’Souza)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/sYWAbbEcRtk/story01.htm

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