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US: Stocks fall on poor Q1 growth

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[NEW YORK] Wall Street stocks finished lower on Wednesday on news the US economy grew just 0.2 per cent in the first quarter.

The Dow Jones Industrial Average fell 74.61 points (0.41 per cent) to 18,035.53.

The broad-based S&P 500 dropped 7.91 (0.37 per cent) to 2,106.85, while the tech-rich Nasdaq Composite Index fell 31.78 (0.63 per cent) to 5,023.64.

Stocks were in the red all day after first quarter growth came in well below the 1.0 per cent projected by analysts due in part to extremely harsh winter weather in some regions and the West Coast port strike.

Later Wednesday, the US Federal Reserve said the slower growth was due "in part" to transitory factors and that the economy should resume expanding at a "moderate pace." That suggested the Fed still expects to begin a slow series of rate rises in the coming months, though not likely in June as many analysts had been expecting until recently.

Twitter fell another 8.9 per cent after Tuesday's 18.2 per cent loss, which followed the company's report that as first-quarter revenues came in at US$436 million, US$20 million below expectations.

Cloud-computing company Salesforce bolted 11.6 per cent higher on a Bloomberg report that it was working with bankers to field bids after being approached by a potential acquirer.

Wynn Resorts sank 16.6 per cent after reporting a first quarter loss of US$44.6 million and announcing it would slash its dividend from US$1.50 per share to 50 cents per share.

Both Delta Air Lines and United Continental fell 2.5 per cent on higher oil prices.

Food company Mondelez International gained 5.2 per cent as first quarter earnings nearly doubled to US$324 million from US$163 million in the year-ago period, despite the drag of the strong dollar.

Starwood Hotels & Resorts Worldwide vaulted 8.3 per cent higher after announcing it hired investment bank Lazard to undertake a strategic review of the company to enhance shareholder value. The move sparked speculation that Starwood, which owns the Westin hotel chain, could be acquired.

Perrigo, which manufactures Sudafed and other over-the-counter drugs, fell 0.9 per cent after opposing the latest buyout offer from Mylan. Mylan, which is also fighting an unsolicited offer from Teva, rose 2.5 per cent. Teva gained 1.3 per cent.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.04 per cent from 2.00 per cent Tuesday, while the 30-year advanced to 2.76 per cent from 2.70 per cent. Bond prices and yields move inversely.

AFP