Wall Street braces for new losses ahead of jobless claims

Stocks were down yesterday after the release of weak GDP growth data.

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By :  ,  Financial Analyst

Wall Street is expected to trade lower for a second day today (April 30th) ahead of the release of a series of economic data.

Investors worry about the state of the US economy as they await weekly jobless claims and inflation data later today, along with the employment-cost index for the first quarter, personal income and consumer spending for March.

Futures for the Dow Jones Industrial Average was down 0.2 per cent to 17,9145 this morning, while the S&P 500 also traded 0.2 per cent lower to 2,095.25. 

US stocks took a hit yesterday after the US Federal Reserve said it kept its zero interest rate policy unchanged following weak first-quarter gross domestic product (GDP) data. The statement did not offer any clues as to when the Fed would start raising interest rates.

Weak corporate earnings

Fresh data also released yesterday showed the US economy expanded by only 0.2 per cent in the first three months of the year, hampered by a strong dollar and low consumer spending during the harsh winter, sparkling fears about the future of the US economy.

The Dow Jones Industrial Average lost 0.4 per cent to 18035.53 on Wednesday, the S&P 500 also declined 0.4 per cent to 2106.85 and the Nasdaq Composite Index dropped 0.6 per cent to 5023.64.

Investors are also weighing-in corporate earnings, with Colgate-Palmolive Co. saying first-quarter sales fell six per cent, below analyst expectations. Time Warner Cable Inc. reported disappointing profit and revenue for the first quarter. Exxon MobilCorp. is forecast to post first-quarter earnings of 82 cents a share, MarketWatch reports.

"US economic data has been weak of late, contributing to weaker quarterly results and a rockier stock market this year," Kevin Kelly, chief investment officer at Recon Capital Partners, told the Wall Street Journal.

"The economic numbers certainly have been damaged, and that story that we’re doing so well is not as intact,” Mr. Kelly said. “You can see that in the market action this year, and you can see that in the earnings."

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