US stocks ended lower today as the Federal Reserve cited weakness in the US economy and data showed US growth slowed more sharply than expected in the first quarter.
But the Fed’s acknowledgement of weakness in some sectors of the economy makes it more likely it will not be ready to raise until at least September, which kept stocks from falling further.
While concerned about lingering economic weakness, US investors also are worried about the possibility of the Fed raising interest rates too soon.
Seven of the 10 S&P 500 sectors ended lower, with just energy, financials and materials in positive territory.
Insurer Humana’s shares fell 7.2 percent to $168.05, the second-biggest loser on the S&P 500, after results missed forecasts. Shares of rivals also fell, including UnitedHealth , which was down 3.4 percent at $113.61. The S&P healthcare index was down 0.8 percent, the biggest drag on the S&P 500.
The Dow Jones industrial average fell 74.61 points, or 0.41 percent, to 18,035.53, the S&P 500 lost 7.91 points, or 0.37 percent, to 2,106.85 and the Nasdaq Composite dropped 31.78 points, or 0.63 percent, to 5,023.64.
In Europe, the pan-European FTSEurofirst 300 index slipped 0.1 percent to 1,616.44 points. The index fell 1.5 percent yesterday but remains close to its highest level in more than 14 years.
Belgian supermarket group Delhaize fell 6.1 percent, the worst performer on the FTSEurofirst, after reporting lower-than-expected operating profits.
Norsk Hydro, one of the world’s largest aluminium producers, also fell 4.4 percent after posting operating earnings just short of forecasts and cutting its estimate for global primary aluminium demand growth.
Gainers included Telecom Italia, which rose 3.3 percent after Italian paper Corriere della Sera wrote that Vivendi’s chief Vincent Bollore aims to strengthen the company’s stake in Telecom Italia and to later strike an alliance with Mediaset.
Germany’s DAX was flat at 11,811.78 points, leaving it some 5 percent below a record high of 12,390.75 points hit earlier in April, while France’s CAC fell 0.1 percent.
However, Athens’ benchmark ATG equity index rose 0.7 percent.
Government officials said Greece was to present draft reform legislation to lenders today, in a bid to show it is serious about acting on pledges to secure aid.
Athens needs to repay loans of about 1 billion euros ($1.1 billion) to the IMF in May. The draft bill is its latest move to speed up negotiations in the hopes of reaching a deal with European and IMF creditors before it runs out of cash.
The FTSEurofirst remains up by around 18 percent since the start of 2015, as economic stimulus measures from the European Central Bank (ECB) have pushed investors towards the better returns available from stocks compared with bonds and cash, whose returns have been hit by record low interest rates.
Signs that the ECB’s plans to buy back government bonds in order to boost the region’s economy have also kept the region’s stock market near multi-year highs.
Lending to euro zone households and firms rose for the first time in three years in March, ECB data showed today, turning the corner less than two months after the bank launched a massive money-printing programme.
Data from Thomson Reuters StarMine has also shown that 64 percent of the companies in the pan-European STOXX 600 index have beaten or met market forecasts with their first quarter results.
Nevertheless, some traders said now might be a good time to cash in on the European stock market rally.
Meanwhile, Japan’s Nikkei share average rose helped by hopes of better shareholder returns after Fanuc Corp doubled its dividend payout ratio, but gains were limited ahead of a two-day U.S. Federal Reserve’s policy meeting.
The Nikkei 225 ended 0.4 percent higher to 20,058.95. The broader Topix gained 0.5 percent to 1,627.43 and the JPX-Nikkei Index 400 advanced 0.6 percent to 4,771.19.
Source: Buenos Aires Herald