The stock market was mixed on Wednesday as investors weighed company earnings against a report that showed economic growth stalled during the fourth quarter.
KEEPING SCORE: The Standard & Poor's 500 index fell 0.4 points, or less than 0.1 percent, to 1,877 as of 11:13 a.m. Eastern time. The Dow Jones industrial average rose six points, or less than 0.01 percent, to 16,542. The Nasdaq composite fell seven points, or 0.2 percent, to 4,095.
THE ECONOMY: The U.S. economy slowed in the first three months of the year as winter storms chilled business activity. The sharp slowdown, while worse than expected, is likely to be temporary as growth rebounds with warmer temperatures. The Commerce Department says growth slowed to a barely discernible 0.1 percent annual rate in the January-March quarter, the weakest since the end of 2012, and down from a 2.6 percent growth rate in the October-December quarter. Economist had forecast growth of 1.1 percent, according to FactSet.
THE QUOTE: The stock market's reaction to the report on the economy was muted because investors have already discounted the quarter due to the unusually cold winter in the U.S. this year, said Lawrence Creatura, a portfolio manager at Federated Investors.
"The stock market is giving this GDP report a pass because of the historically cold weather in the first quarter," Creatura said. "If you see a similar print for the second quarter, you're going to get a much different response."
PEP TALK: Pepco Holdings surged $4.07, or 17.9 percent, to $26.84 after it agreed to be acquired by energy provider Exelon for $6.83 billion to create a large electric and gas utility in the mid-Atlantic region. Exelon will pay $27.25 per Pepco share, an 18 percent premium to the company's $23.10 closing price on Tuesday.
TWITTER STORM: Twitter fell $4.36, or 10 percent, to $38.27 in early trading. The social media company's growth disappointed investors when it reported quarterly results late Tuesday. Twitter had 255 million monthly users at the end of March, up 25 percent from a year earlier, but 2 million fewer than industry analysts had expected. Twitter shot higher after its IPO at $26 a share in November, going as high as $73.31 in December, and has been steadily declining since then.
NOT WHAT THE DOCTOR ORDERED: Express Scripts fell $4.21, or 5.9 percent, to $66.81 after it lowered its earnings guidance for the year, saying that it would handle a lower volume of prescriptions. The nation's largest pharmacy benefits manager also reported a 12 percent drop in its first-quarter earnings Tuesday. Its prescription sales were hit by severe winter weather and slower-than-expected enrollment in the new public insurance exchanges.
FED: The Federal Reserve will release a statement following the conclusion of its two-day meeting at 2 p.m. Eastern time Wednesday. Policy makers are expected to make a further reduce the Fed's bond purchases, even though growth slowed in the first quarter.
TREASURYS AND COMMODITIES: Bond prices rose. The yield on the 10-year Treasury note fell to 2.66 percent from 2.70 percent on Tuesday. The price of oil fell 93 cents, or 0.9 percent, to $100.35 a barrel.
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