US stocks fell on Fed news and weak data - New York Report

US STOCKS ended lower yesterday as the Federal Reserve cited weakness in the US economy and data showed growth slowed more sharply than expected in the first quarter.

But the Fed’s acknowledgement of weakness in some sectors of the economy makes it more likely it will not be ready to raise until at least September, which kept stocks from falling further.

“We all know the Fed would love to start normalising rates, but the simple fact is, the data does not warrant that action right now,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services in New York.

While concerned about lingering economic weakness, US investors also are worried about the possibility of the Fed raising interest rates too soon.

Seven of the 10 S&P 500 sectors ended lower, with just energy, financials and materials in positive territory.

Insurer Humana’s shares fell 7.2 per cent to $168.05, the second-biggest loser on the S&P 500, after results missed forecasts. Rivals’ shares also fell, including UnitedHealth, which was down 3.4 per cent at $113.61. The S&P healthcare index fell 0.8 per cent, the biggest drag on the S&P 500.

The Dow Jones industrial average fell 74.61 points, or 0.41 per cent, to 18,035.53, the S&P 500 lost 7.91 points, or 0.37 per cent, to 2,106.85 and the Nasdaq Composite dropped 31.78 points, or 0.63 per cent, to 5,023.64. Twitter fell 8.9 per cent to $38.49, a day after it cut its full-year forecast due to weak demand for its new direct response advertising.