The economy has snapped out of its winter stupor, but investors were playing it cool early Wednesday as they brace for the latest statement from the Federal Reserve.
The Dow Jones industrial average was down slightly, while the S&P 500 was flat. The Nasdaq was up 0.3%.
Economy warms up: The U.S. economy has emerged from a first quarter deep freeze. Gross domestic product, the broadest measure of economic growth, increased at an annual rate of 4% in the second quarter, the Commerce Department said.
The second-quarter growth rate was better than expected. The economy has rebounded from the weather-driven slowdown in the first three months of the year, said Joseph Lake, an analyst at The Economist Intelligence Unit. The overall growth rate for the first half of 2014 is 1.8%, he said, which is not far below the 2% average for the past few years.
“The U.S. is, for the most part, growing at a reasonably healthy pace,” said Lake.
The job market is also showing signs of strength. Payroll processing firm ADP said private sector employers added 218,000 jobs in July. That was down slightly from the month before, but the trend in private sector payrolls is still consistent with a “steadily improving job market,” said Mark Zandi, chief economist of Moody’s Analytics.
Still to come, the Fed will release a statement outlining its latest monetary policies at 2 p.m. ET. It’s widely believed that the central bank will announce another $10 billion pullback in monthly bond purchases, but investors will be scrutinizing every word of the statement for clues as to when the Fed plans to raise interest rates.
Stock market movers — Twitter, Amgen, Barclays: Twitter shares soared more than 20%. The social media company posted surprisingly strong second-quarter sales late Tuesday.
Shares in Amgen gained after the company announced it was cutting up to 2,900 jobs, or about 12-15% of its workforce.
In London, investors pushed up Barclays shares by about 3.5% after the bank’s first half earnings were well received.
Sprint shares gained after the telecommunications company reported better-than-expected earnings. Edwards Lifesciences, which makes heart valves, also gained on strong earnings. Kraft Foods and Whole Foods will report after the close.
Russian market mystery: Trading on Moscow’s main stock market was halted for a lengthy period earlier Wednesday. But the MICEX was up more than 1% once trading resumed as investors were relieved that new European and U.S. sanctions against Russia were not as bad as feared.
European markets were mixed in afternoon trading. Asian markets mostly closed with small gains.
