Wall Street edges down on mixed data, RIM shares fall
U.S. stocks edged just slightly lower despite GDP growth turning negative for the first time since the last recession in the fourth quarter, as ADP payrolls data in January was better than expected.
As of half past noon ET today, the Dow was down 19 points at 13,936, the Nasdaq fell 2 points to 3,152 and the S&P 500 retreated 3 points to 1,505.
On the economic front, ADP’s payrolls data report for January showed private-sector jobs growth of 192,000, up from a downwardly revised 185,000 in December. The consensus estimate was for growth of 172,000, according to Bloomberg.
The number is important because it gives investors a clue to the all-important U.S. nonfarm-payrolls data that is slated for Friday.
GDP data, however, was negative, with the Commerce Department releasing its fourth quarter estimate of economic growth, declining 0.1%. Economists expected the economy to grow around 1% in the last three months of 2012, from growth of 3.1% in the third quarter.
Meanwhile, the Fed will make its policy announcement at 2:15pm ET this afternoon, with the central bank expected to stay the course of its bond buying policies.
On the corporate front, U.S.-listed shares of BlackBerry Research In Motion (NASDAQ:RIMM) fell more than 7% after the Canadian company launched its BlackBerry 10 operating system and new devices, and said it would change its name to BlackBerry.
As part of its reinvention, CEO Thorsten Heins told the world that the company’s new name is in keeping with the creation of one consistent brand as the company transforms itself “inside and out”.
As Heins unveiled the Blackberry Z10 and Q10 to a crowd of enthusiastic Blackberry fans, he noted that the new smartphones have “bar none the largest catalogue of apps – over 70,000 - for a first generation product in mobile”.
Earnings also continued to roll out again Wednesday, with Boeing (NYSE:BA) reporting a sharply lower fourth quarter profit, but still beating analyst estimates as revenue rose 14%. The company expects a 2013 adjusted profit of $6.10 to $6.30 a share, which assumes "no significant" financial impact from the grounding of its 787 Dreamliner earlier this month pending an investigation by the Federal Aviation Authority after a series of incidents with the aircraft.
Shares of the commercial jet maker were up more than 1.2% Wednesday.
In the energy sector, Phillips 66 (NYSE:PSX) reported a lower profit in the fourth quarter as revenue fell to $44.67 billion from $50.45 billion. On an adjusted basis, profit of $2.06 per share topped estimates for $1.67 per share.
Meanwhile, Hess Corp. (NYSE:HES) swung to a profit of $566 million, or $1.66 a share, from the prior year’s loss of $131 million, or 39 cents a share. The company had been expected to show a profit of $1.20 a share for the latest quarter. Quarterly revenue improved to $9.7 billion from $8.82 billion, as investors consider its recently announced plan to divest assets not used in its exploration and production activities.
Elsewhere, Amazon (NASDAQ:AMZN) shares were up more than 5%, a day after the online retailer reported a strong operating profit, but weaker than expected fourth quarter sales. The company posted a fourth-quarter profit of $97 million, or 21 cents a share, on revenue of $21.27 billion, compared to $177 million, or 38 cents a share, on $17.43 billion in sales.
Operating income was $405 million, compared with $260 million in the year-ago period.
Analysts surveyed by FactSet had forecast Amazon to earn 28 cents a share on revenue of $22.26 billion.
After the bell Tuesday, earnings from Facebook (NASDAQ:FB) are expected with the social network anticipated to report a profit of 15 cents a share, according to a consensus survey by FactSet. Shares of the company were up 1.7% in anticipation of the results.
Gold futures surged after the negative GDP data, as investors were drawn to the yellow metal's safe haven appeal, lately up by $19 to $1,682 an ounce. March crude, meanwhile, edged up 9 cents to $97.66 a barrel.
European markets finished lower today with shares in France leading the region. The CAC 40 was down 0.54% while Germany's DAX was off 0.47% and Britain's FTSE 100 retreated by 0.25%.