Stocks slip as US economy slows in first quarter

Associated Press

NEW YORK (AP) — The stock market is edging lower Wednesday after the U.S. economy slowed more drastically in the first quarter than economists had believed.

KEEPING SCORE: The Standard & Poor's 500 index fell three points, or 0.2 percent, to 1,874 as of 9:52 a.m. Eastern time. The Dow Jones industrial average was little changed from Tuesday at 16,534. The Nasdaq composite fell 27 points, or 0.7 percent, to 4,076.

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.

TWITTER STORM: Twitter fell $4.98, or 12 percent, to $37.64 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.

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.

NOT WHAT THE DOCTOR ORDERED: Express Scripts fell $5.22, or 7.4 percent, to $65.78 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.

TREASURYS AND COMMODITIES: In government bond trading, prices rose. The yield on the 10-year Treasury note fell to 2.69 percent from 2.70 percent on Tuesday. The price of oil fell 93 cents, or 0.9 percent, to $100.35 a barrel.