Wall Street little changed as GDP offsets jobs dataComment on this story
New York - US stocks were little changed on Wednesday after data showed the economy grew at a sharply lower-than-expected pace in the first quarter, but gains in private payrolls kept the market near break-even.
Gross domestic product expanded at a 0.1 percent annual rate, the slowest since the fourth quarter of 2012, as exports and inventories weighed, but activity already appears to be bouncing back.
It was a sharp pullback from the fourth quarter's 2.6 percent pace.
US private employers, however, beat expectations by adding 220,000 workers in April, the highest amount since November, and gains in the prior month were revised up.
Chicago business activity also rose more than expected in April, jumping to its highest since October 2013.
Despite the large miss on GDP, the S&P 500 remained within 1 percent from its record closing high set early this month.
“There's no hiding the fact the GDP number is a disappointment, but even though it came much lower than expectations it's getting a hall pass because we are expecting to have a better second quarter,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
“The market is focusing on what economic data is telling us about Q2 and there's a reason to believe the demand loss was more weather-related than anything,” he said.
Hogan cited the Chicago PMI, internals of the GDP report, and ADP as evidence the second quarter will be stronger.
The Dow Jones industrial average rose 2.25 points or 0.01 percent, to 16,537.62, the S&P 500 lost 1.37 points or 0.07 percent, to 1,876.96 and the Nasdaq Composite dropped 11.172 points or 0.27 percent, to 4,092.371.
The S&P was struggling to stay in the black for the month, with a 0.2 percent advance so far.
It could be the third consecutive month of gains for the S&P 500 and Dow, while the Nasdaq was on track to post its second straight month of losses.
Twitter shares fell 10.1 percent to $38.30 and hit a record low intraday level at $37.25, a day after it showed lackluster user and usage growth for the second consecutive quarter.
EBay shares fell 6 percent to $51.29, weighing the most on the Nasdaq 100, after it forecast lower-than-expected earnings this quarter.
Nuclear power producer Exelon, which reported earnings earlier on Wednesday, said it would buy Pepco Holdings for $6.83 billion. Pepco shares jumped 17.5 percent to $26.77 and Exelon fell 4.2 percent to $34.65.
French engineering group Alstom said it would study a $16.9 billion offer from General Electric for its energy arm but left the door open for a rival bid from Germany's Siemens.
GE shares were flat.
Markets will have their eyes on the Federal Reserve's policy-setting meeting, as well, set to end later on Wednesday.
The Fed is expected to cut its bond-buying program by a further $10 billion, confident the US economy will pick up steam after a winter slowdown. - Reuters