Shares fall on U.S. GDP data; dollar pares losses after Fed
By Sam Forgione
NEW YORK (Reuters) - Stock markets worldwide fell on Wednesday after weak corporate results and data showing U.S. economic growth braked more sharply than expected in the first quarter, while the dollar pared losses after a Federal Reserve policy statement.
Commerce Department data showed U.S. gross domestic product expanded at an only 0.2 percent annual rate, marking the weakest reading in a year, leading to a lower open on Wall Street.
The data hit European shares, which also suffered from weak corporate results from companies such as Delhaize DELB.BR and Norsk Hydro (NHY.OL: Quote). The FTSEurofirst 300 index of top regional shares posted its biggest daily decline since early January.
"People are speculating that we are in a low patch after growing well over the last year, and the pace and momentum going in to the second quarter doesn't seem to be as strong as people expected," said Omar Aguilar, chief investment officer at Charles Schwab Management in San Francisco.
A stronger euro also weighed on European stock markets, with the currency hitting a roughly eight-week high against the U.S. dollar at $1.11880 EUR=EBS. The dollar index .DXY, which measures the greenback against a basket of six major currencies, hit a roughly nine-week low of 94.678 after the GDP data.
The dollar pared losses after the Fed's latest statement on monetary policy. While the Fed showed signs that it was struggling to proceed with its plans to raise interest rates this year, the central bank acknowledged slow economic growth during the winter months in part reflected "transitory factors," which supported the dollar.
The Dow Jones industrial average .DJI was last down 76.31 points, or 0.42 percent, at 18,033.83. The S&P 500 .SPX was down 7.47 points, or 0.35 percent, at 2,107.29. The Nasdaq Composite .IXIC was off 25.61 points, or 0.51 percent, at 5,029.81.
MSCI's all-country world equity index .MIWD00000PUS was last down 2.5 points or 0.56 percent, at 440.13. Continued...