US open: Stocks open lower following Fed rate announcement

US stocks opened lower on Thursday, following on from the sharp drops seen in the previous session on the back of a less dovish than expected rate announcement by the Federal Reserve.

At 1530 GMT, the Dow Jones Industrial Average was down 0.57% to 23,190.52, while the S&P 500 traded 0.32% lower at 2,498.88 as the Nasdaq had lost 0.11% to 6,629.41.

On Wednesday, US equity markets slumped to a 15-month low, with the Dow shedding 351.98 points, after the Fed hiked interest rates by 25 basis points for the fourth time this year, but lowered projections for future rate hikes and economic growth and downplayed the recent turmoil in financial markets.

The US central bank said it now expects two more rate hikes next year, down from a previous projection of three, but disappointing market participants who were pricing in just one. The Fed also cut its GDP growth estimate for this year by 0.1 percentage points to 3%, while 2019 growth outlook was reduced by 0.2 percentage points to 2.3%.

Deutsche Bank said: "The post-meeting statement, the dots and the press conference, combined, came across as a relatively balanced step in a more dovish direction for the Fed, but less so than the market was expecting."

"Although more rate hikes are likely coming, the timing is now less certain, as the Fed has clearly moved closer to slowing the current pace of tightening. Further rate hikes will increasingly be driven by both the incoming data and the performance of financial markets as they influence the economic outlook."

In other news, West Texas Intermediate fell 2.82% to $46.81 a barrel and Brent Crude dropped 2.22% to $55.97.

The USD slipped 0.20% against the GBP to 0.7915.

Over on the corporate front, Accenture slumped 4.01% after its first-quarter results, while Conagra Brands tumbled 11.58% after its second-quarter numbers.

Walgreens Boots Alliance lost 2.33% despite its quarterly earnings and revenue beat analysts’ expectations, while BlackBerry rallied 4.48% in early trade after posting a better-than-expected quarterly profit.

In data news, the number of Americans filing for unemployment benefits rose less than expected last week, according to data from the Labor Department.

US initial jobless claims were up 8,000 to 214,000, falling a little short of expectations for a reading of 216,000.

Meanwhile, the four-week moving average fell by 2,750 to 222,000. The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

Continuing claims - which represent the number of people already collecting unemployment benefits - increased to 1.688m from 1.661m the week before, versus expectations of 1.665. The four-week moving average came in at 1.673m, up 6,750 from the previous week's unrevised average.

Elsewhere, manufacturing conditions in the Philadelphia region unexpectedly deteriorated in December, to a more than two-year low, according to a survey released on Thursday.

The Philadelphia Fed current manufacturing activity index fell to 9.4 from 12.9 in November, hitting its lowest level since August 2016, with more than 26% of manufacturers reporting increases in overall activity this month, while 17% reported declines.

The new orders index increased five points to 14.5 but remains notably lower than its average reading for the year. Meanwhile, the current shipments index was down 12 points to 10.0 - its lowest reading in 27 months.

Both the unfilled orders and delivery times indices were positive this month, suggesting higher unfilled orders and slower delivery times.