Stocks close lower amid weak GDP, Fed statement
Stocks closed lower Wednesday as investors digested weaker-than-expected economic growth and the latest statement from the Federal Reserve that indicated policymakers were still grappling with when to begin raising interest rates.
At the conclusion of its two-day policy meeting, the Fed lowered its economic outlook and said growth "slowed during the winter months, in part reflecting transitory factors." But the Fed expects the economy to rebound and grow at a moderate pace in coming months.
Policymakers gave no clear signal of when it plans to raise its benchmark interest rate for the first time since 2006 but they have indicated they expect to act this year.
The Fed edited out all calendar references in its policy statement related to its rate-hike timetable, but Wall Street pros say the odds of a June hike have diminished further.
Earlier Wednesday, the Commerce Department reported that gross domestic product — the value of goods and services produced in the U.S. — expanded at a seasonally adjusted annual rate of 0.2% in first quarter. That's down from 2.2% in the fourth quarter.
The Dow Jones industrial average fell 74.61 points, or 0.4%, to 18,035.53 and the Standard & Poor's 500 index dropped 7.91 points, or 0.4%, to 2106.85. The Nasdaq composite closed down 31.78 points, or 0.6%, to 5023.64. Yields on 10-year government bonds sprang above 2%, rising to 2.05% from 2% late Tuesday.
European benchmarks got hammered on a combination of the GDP news, anticipation of the timing of Fed rate hikes and the strengthening euro. Germany's DAX suffered a 3.2% pounding. The CAC 40 of France ended down 2.6%, while the FTSE of Britain slid 1.2%.
Twitter is getting pounded for a second straight day after the stunning early release of its earnings report amid regular trading Tuesday. Shares of TWTR fell 8.9% after dropping 18% on Tuesday.
On Tuesday, shortly after 3 p.m. ET, financial services firm Selerity caused havoc for Twitter when it tweeted the results of the micro-blogging company's first-quarter earnings a solid hour before they were scheduled to be released after markets closed.
Twitter's leaked earnings were not a hack job, but only a high-powered computer could have detected the early release of the sensitive financial data.
Fiat Chrysler Automobiles reported earnings per share of 52 cents compared with a loss of $1.55 per share for the same period a year ago. Those results accelerated way beyond analysts' expectations of just 7 cents per share. Shares of FCAU, however, dropped 5.5%.
Pending home sales rose, the National Association of Realtors says. Its seasonally adjusted pending home sales index climbed 1.1% to 108.6 in March.
In Asia, Japan's Nikkei 225 index ended up 0.4% and Hong Kong's Hang Seng index dropped 0.2%. The Shanghai Composite was flat.
Stocks cut early losses and closed mostly higher Tuesday as the Fed began its two-day meeting.
Contributing: Kaja Whitehouse, Jane Onyanga-Omara, Adam Shell