Wall Street little moved by GDP, ADP data ahead of Fed announcement
U.S. stock futures were barely moving after economic data released Wednesday included a better-than-expected ADP jobs report and second quarter GDP reading, as investors were uncertain how the figures would impact when the Fed decides to start tapering monetary stimulus ahead of the FOMC announcement this afternoon.
Futures on the three main U.S. market indices were moving between slight losses and gains as of 8:35am ET.
The FOMC monetary policy decision will be announced at 2:15pm ET, after the two-day policy setting meeting, with investors to closely read the statement for more clarity and reassurance on when exactly the central bank might start reducing its bond buying program, as Bernanke only said last time "later this year".
Ahead of the announcement, second quarter GDP growth smashed expectations, rising 1.7%, compared to the 1% rate expected, and versus the downward revised 1.1% growth in the first quarter. The Labor Department has overhauled how the government measures GDP, such as counting R&D as an investment, which could have boosted the numbers.
ADP also reported that private payrolls grew by 200,000 in July, from an upward revised 198,000 in June, far beating consensus expectations for growth of 179,000, according to Bloomberg.
On Tuesday, U.S. stocks barely budged as investors were unwilling to make any big bets ahead of the Fed decision, but the benchmark indices are still on track for some strong monthly gains. The Dow is up more than 3.6% so far for July, while the Nasdaq is higher by 5.3% and the S&P 500 has climbed 4.4%.
On the corporate front Wednesday, cable-operator Comcast Corp. (NASDAQ:CMCSA) saw its shares rise more than 3.7% premarket after it said second-quarter profit rose 29% as higher prices worked to offset a lower amount of video subscribers.
Phillips 66 (NYSE:PSX) shares meanwhile declined more than 3% after the company reported an adjusted profit of $1.50 per share, compared to $2.23 a share a year ago. After the closing bell, earnings from Whole Foods Market (NASDAQ:WFM) and MetLife (NYSE:MET) are due out.
In other news, shares of Facebook (NASDAQ:FB) were rising in premarket trade, hitting their $38 IPO price after yesterday announcing a program to help developers get their mobile games to a broader audience. The pilot project aims to reach out to Facebook users with a new selection of games specifically targeted to their interests. The social networking site will make money by sharing the revenue with developers in exchange for promoting the games over its platform. The list of 10 games so far include a social poker, a city-building simulator and medieval strategy.
Pfizer (NYSE:PFE) has agreed to pay $491 million to settle criminal and civil charges over the illegal marketing of kidney-transplant drug Rapamune, pleading guilty. Shares of the company were down 0.75% premarket.
Shares of Air Products and Chemicals International (NYSE:APD) jumped more than 4% in premarket action after CNBC reported that activist investor Bill Ackman’s Pershing Square Capital Management had taken a $2.2 billion stake in the firm.
In international news, Asian stocks finished mixed, while European shares fell lower after the U.S. GDP data. In Europe, eurozone unemployment dropped for the first time in two years in June. The drop, however, was too small to impact the unemployment rate, which stayed at a record 12.1% for the fourth month in a row. Meanwhile, German retail sales fell 1.5% in June from the month before, far below expectations.
Gold futures declined after the GDP data, down $3 to $1,322 an ounce, while oil for September delivery gained 48 cents to $103.57 a barrel.
The FTSE 100 was lately higher by 0.68%, while the DAX was leading the CAC 40 lower. They were down 0.48% and 0.31% respectively.