US close: Stocks in the pink as GDP miss spikes hike likelihood

US stock indices finished slightly lower on Thursday despite weaker than expected US economic growth figures released before the opening bell, all remaining close to their highest finish in two month on the previous day.

The S&P 500 lost only a slight sheen, down 0.04% at 2,089.41, though a new two-month intraday high was set just prior to the close. The Dow Jones closed down 0.13% at 17,755.8 and the Nasdaq 100 ended 0.17% lower at 4,670.77 points, both coming close during late trading to their two-month high.

Earlier, European stocks pulled back slightly, while Asian markets struggled for direction and oil prices declined, with West Texas Intermediate losing 1.41% to $45.32 a barrel and Brent losing 1.59% to $48.28 a barrel.

The dollar was broadly flat against the euro and the pound and gained 0.16% against the yen, while gold futures edged 0.37% lower to $1,151.84.

Confidence in US equities remained after the Federal Reserve’s decision to keep interest rates unchanged at 0.25% on Wednesday, with the door left open to an increase in December and global economic headwinds downplayed in its statement on the decision.

GDP slows down more than expected

Figures released early on Thursday showed US gross domestic product expanded 1.5% over the three months to September, slower than the 3.9% gain registered in the previous quarter and weaker than analysts’ expectations for a 1.6% reading.

Personal consumption expenditures, which make up the lion's share of GDP, grew at 3.2% after expanding by 3.6% over the previous three months, falling slightly short of consensus for a 3.3% increase.

The report was not expected to give the Fed much extra fuel but the weakness in GDP because of inventories, when final demand was solid, will have encouraged the Fed to think the recent run of weak data is mainly due to an inventory cycle and helps to explain the surprising hawkishness of yesterday’s FOMC statement.

“The high frequency data suggest that the US economy has entered the fourth quarter on a weak footing," said Markit's chief economist Chris Williamson.

“The US GDP data also add to signs that the global economy slowed in the third quarter, something which will worry policymakers, even if they are loathe top openly admit it.”

However, economists at BNP Paribas perceived “two hawkish tweaks” to the FOMC statement, due to the fact that GDP data were weak because of inventories, when final demand was solid.

This “will have encouraged the Fed to think the recent run of weak data is mainly due to an inventory cycle and helps to explain the surprising hawkishness of yesterday’s FOMC statement”.

They added: “The Fed wants us to believe that it did not go in June and September, when the economy had a stronger pulse than it does now, but it is seriously considering December. This is probably because it sees the economic slowdown as largely an inventory correction, and therefore temporary.

“Its concerns about developments abroad have faded somewhat. We don’t think the Fed will get the data it is looking for by its December meeting and continue to think that the first rate hike will not come until March 2016.”

Elsewhere, according to the Department of Labor, new claims rose by 1,000 to 260,000 in the week to 24 October, compared with analysts' expectations for a 265,000 reading.

Meanwhile, the average of new claims over the last four weeks fell by 3000 to a seasonally adjusted 259,250, the lowest reading in 42 years, the report added.

Bad new continues for Valeant after the bell

In company news, GoPro tumbled 15.7% after the maker of action cameras said late on Wednesday its earnings and sales missed estimates.

Valeant’s descent continued after several insurers and pharmacies dumped its Philidor pharmacy and raising more questions about its activities.

Biopharmaceutical group Baxalta gained 1.33% after delivering a positive full-year outlook on the back of better-than-expected quarterly profit, while the New York Times gained 2.22% after swinging to a profit.

Botox treatments-maker Allergan, slid 0.06% after it revealed it was recently approached by Pfizer over a potential takeover, while Starbucks and LinkedIn will report after the close.

NXP Semiconductors, the Netherlands-based chip maker, fizzled lower by the most in four years after management surprisingly forecast a decline in fourth-quarter revenue as customers pulled back on orders amid a slowing global economy and higher inventories of unsold chips.

S&P 500 - Risers
Hanesbrands Inc. (HBI) $31.65 +14.67%
Zimmer Biomet Holdings Inc (ZBH) $104.87 +7.15%
FMC Corp. (FMC) $39.77 +6.00%
Allergan plc (AGN) $304.38 +5.98%
Vertex Pharmaceuticals Inc. (VRTX) $126.17 +5.05%
O'Reilly Automotive Inc. (ORLY) $275.95 +4.91%
Harley-Davidson Inc. (HOG) $49.96 +4.67%
Sherwin-Williams Co. (SHW) $258.11 +4.60%
Murphy Oil Corp. (MUR) $28.26 +4.20%
Host Hotels & Resorts Inc. (HST) $17.24 +4.11%

S&P 500 - Fallers
Peabody Energy Corp. (BTU) $13.19 -24.11%
F5 Networks Inc. (FFIV) $110.08 -9.28%
Borg Warner Inc. (BWA) $41.57 -8.70%
Avago Technologies Ltd. (AVGO) $120.09 -5.51%
Goodyear Tire & Rubber Co. (GT) $31.79 -4.82%
Pitney Bowes Inc. (PBI) $20.10 -4.74%
CONSOL Energy Inc. (CNX) $6.77 -4.24%
Micron Technology Inc. (MU) $16.21 -4.20%
Baxalta Incorporated (BXLT) $34.45 -4.09%
D. R. Horton Inc. (DHI) $29.18 -4.08%

Dow Jones I.A - Risers
Apple Inc. (AAPL) $120.53 +1.06%
Johnson & Johnson (JNJ) $101.37 +0.89%
Procter & Gamble Co. (PG) $77.02 +0.67%
Walt Disney Co. (DIS) $115.04 +0.61%
Wal-Mart Stores Inc. (WMT) $57.96 +0.56%
Coca-Cola Co. (KO) $42.79 +0.14%
Chevron Corp. (CVX) $89.89 +0.11%
Travelers Company Inc. (TRV) $114.29 +0.03%

Dow Jones I.A - Fallers
Intel Corp. (INTC) $34.02 -1.99%
Pfizer Inc. (PFE) $34.77 -1.92%
Microsoft Corp. (MSFT) $53.36 -1.15%
Cisco Systems Inc. (CSCO) $29.14 -0.75%
Goldman Sachs Group Inc. (GS) $189.89 -0.75%
Boeing Co. (BA) $147.18 -0.47%
Visa Inc. (V) $78.51 -0.46%
JP Morgan Chase & Co. (JPM) $65.21 -0.44%
Merck & Co. Inc. (MRK) $54.87 -0.42%
American Express Co. (AXP) $74.22 -0.31%

Nasdaq 100 - Risers
Vertex Pharmaceuticals Inc. (VRTX) $126.17 +5.05%
Charter Communications Inc. (CHTR) $193.33 +5.01%
O'Reilly Automotive Inc. (ORLY) $275.95 +4.91%
Wynn Resorts Ltd. (WYNN) $69.90 +3.86%
CH Robinson Worldwide Inc (CHRW) $69.38 +2.04%
Mylan Inc. (MYL) $45.78 +1.98%
Express Scripts Holding Co (ESRX) $87.15 +1.82%
Comcast Corp. (CMCSA) $63.06 +1.81%
Liberty Media Corporation - Class A (LMCA) $41.14 +1.63%
Amazon.Com Inc. (AMZN) $626.55 +1.53%

Nasdaq 100 - Fallers
Nxp Semiconductors Nv (NXPI) $73.00 -19.71%
Avago Technologies Ltd. (AVGO) $120.09 -5.51%
Vimpelcom Ltd Ads (VIP) $3.86 -4.93%
Micron Technology Inc. (MU) $16.21 -4.20%
Skyworks Solutions Inc. (SWKS) $74.63 -3.70%
Texas Instruments Inc (TXN) $56.57 -3.58%
Nvidia Corp. (NVDA) $27.68 -3.45%
Monster Beverage Corp (MNST) $136.64 -3.33%
Linear Technology Corp. (LLTC) $44.20 -3.32%
Verisk Analytics Inc. (VRSK) $70.26 -3.30%