NEW YORK (AP) — The stock market was mixed on Wednesday as investors weighed company earnings against a report that showed economic growth stalled during the fourth quarter. Stocks were little changed after the Federal Reserve announced that it would further reduce its bond purchases.
KEEPING SCORE: The Standard & Poor's 500 index rose one points, or 0.1 percent, to 1,879 as of 2:12 p.m. Eastern time. The Dow Jones industrial average rose 17 points, or 0.1 percent, to 16,549. The Nasdaq composite fell eight points, or 0.1 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. Economists 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 $3.93, or 17.2 percent, to $26.71 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.
EARNINGS BOOST: Sealed Air rose $1.46, or 4.4 percent, to $34.05 after the food packaging company reported earnings that easily beat Wall Street's expectations. The company also said it was on track to post full-year earnings at the upper end of the range of its forecast.
TWITTER STORM: Twitter fell $4.62, or 10.8 percent, to $38. 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, climbing as high as $73.31 in December. The stock has been steadily declining since then.
NOT WHAT THE DOCTOR ORDERED: Express Scripts fell $3.71, or 5.2 percent, to $67.33 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 said Wednesday it would reduce its monthly bond purchases by $10 billion to $45 billion. The stimulus should help hold down long-term interest rates and support the mortgage market. The Fed also reaffirmed its plan to keep short-term interest rates low to support the economy "for a considerable time" after its bond purchases end, likely late this year. The announcement was in line with what economists had been expecting.
TREASURYS AND COMMODITIES: Bond prices rose. The yield on the 10-year Treasury note fell to 2.67 percent from 2.70 percent on Tuesday. The price of oil fell $1.79, or 1.8 percent, to $99.49 a barrel.