- FOMC policy decision in focus
- ADP payrolls beat forecast
- US GDP expands just 0.1 per cent in Q1
- Twitter, eBay provide a drag
Dow Jones: -0.04%
S&P 500: -0.24%
US stocks opened slightly lower on Wednesday on the back of mixed economic data as investors scaled back risk ahead of the Federal Reserve policy decision later on.
The Federal Open Market Committee began its two-day policy meeting on Tuesday and is widely expected to continue tapering its asset purchase programme by $10bn each meeting. This will bring the monthly stock of bond buying down from $55bn to $45bn.
The Dow Jones Industrial Average was trading 0.04% down early on, the S&P 500
lost 0.24%, while the Nasdaq dropped 0.74%.
Markets were reacting to figures released before the opening bell that showed that while private-sector jobs grew at their fastest pace in five months, US economic growth was at its weakest in three years.
Private-sector payrolls as measured by ADP increased by 220,000 last month, up from 209,000 in March and ahead of the 200,000 gain expected by analysts.
However, gross domestic product expanded at an annual rate of just 0.1% in the first quarter, a sharp slowdown from the 2.6% growth registered in the fourth quarter of 2013 and well below the 1% expansion expected by analysts.
"Since the equity market is hardly in freefall as a result of the number, investors might take solace from the crowd that the consequences of the event aren't yet biting. But the session is far from over yet, and traders will likely be more vigilant of taking on risk today than most others, waiting to see how flows direct prices," said Trader David White from Spreadex.
tumble as user growth slows
Twitter's share price sunk as much as 12% after the social media messaging service disappointed investors with subdued user number growth in the first quarter. Despite beating analysts' forecasts, the company reported that membership rose at an annual rate of 25% to 255m in the first three months of the year, a slowdown from the 30% growth seen in the previous period.
E-commerce group eBay also beat analysts' estimates but saw shares sink after disappointing with its outlook. The company forecast a smaller-than-expected profit for the second quarter and reported a $3bn tax charge to repatriate foreign earnings.
Nuclear plant operator Exelon fell after announcing that it will acquire Pepco, the utility group, for $27.25 a share, equal to $5.4bn. Shares in the latter surged after the bell.
Pharmacy group Express Scripts dropped as it slashed its 2014 forecasts and released lower-than-expected adjusted profits for the first quarter.
West Texas Intermediate futures were 1.54% lower at $99.72 a barrel on the NYMEX.
The yield on a 10-year US Treasury was down two basis points at 2.67%.