U.S. stocks dip on U.S. Q4 contraction

2013-01-30 22:36:50 GMT2013-01-31 06:36:50(Beijing Time)  Xinhua English

NEW YORK, Jan. 30 (Xinhua) -- U.S. stocks closed lower on Wednesday, as the Federal Reserve released a bit more pessimistic statement after the U.S. economy shrunk unexpectedly in the fourth quarter.

The main stock indices accelerated to drop after the Fed made a statement in the afternoon following a two-day policy-making meeting, saying that recent months have seen a pause in economic activity because of temporary forces including bad weather.

U.S. gross domestic product fell unexpectedly in the fourth quarter at a 0.1 percent annual rate, the worst performance since the second quarter of 2009, when the recession ended, the Commerce Department said on Wednesday.

The central bank also added that it anticipated short-term interest rates would remain near zero unless the jobless rate dropped to at least 6.5 percent, which was in consistent with market expectations.

The market failed to respond with gains to encouraging jobs data after the opening bell. The private sector added 192,000 jobs in January, slightly higher than expected, according to the latest report released on the same day by payroll processing firm ADP.

Upbeat earnings reports from notable companies once push the equity markets into positive territory in the morning session.

Shares of Amazon moved up 12.40 U.S. dollars apiece, or 4.76 percent, after the world's largest online retailer reported following Tuesday's closing bell that the company's revenue jumped 22 percent and margins were strong during the fourth quarter, compared to the year-ago period.

Boeing shares advanced 1.25 percent to 74.57 dollars after the Chicago-based company said its net income in the fourth quarter was 978 million dollars, or 1.28 dollars a share, 9 cents higher than the average estimates from analysts. The aircraft maker has been confronted with series of problems with the batteries on its new 787 Dreamliner recently.

Shares of Research in Motion plunged 12.01 percent to 13.78 dollars though the company formally introduced its BlackBerry 10 operating system on two new handsets and changed its corporate name to BlackBerry on Wednesday.

Facebook shares still fell in after-hour trading even though the social networking released a quarterly profit that beat market estimates after the closing bell. The company earned 0.17 dollar per share on the revenue of 1.59 billion dollars in the fourth quarter.

The Dow Jones Industrial Average dipped 44.31 points, or 0.32 percent, to 13,910.11. The Standard & Poor's 500-stock Index gave up 5.88 points, or 0.39 percent, to 1,501.96. The Nasdaq edged down 11.35 points, or 0.36 percent, to 3,142.31.

Light, sweet crude for March delivery gained 0.38 percent to settle at 97.94 dollars a barrel on the New York Mercantile Exchange as improvement of European economic sentiment offset the effect of the contraction of U.S. economy in the fourth quarter.

Brent crude for March delivery also rose and last traded close to 115 dollars a barrel.

The U.S. dollar weakened against most of major currencies on Wednesday due to shrinking U.S. economy in the fourth quarter.

Gold future for April delivery on the COMEX division of the New York Merchant Exchange rose 1.14 percent to settle at 1,681.6 dollars per ounce as the dollar retreated.

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