US open: Stocks flat as economic growth slows more than expected

With data revealing that the US economy grew less than expected last quarter, the nation's equity markets were broadly unchanged on Friday, along with tepid earnings from blue-chip companies.

The Dow Jones Industrial Average was flat at 20,101.58, while the S&P 500 was down 0.08% to 2,294.84 and the Nasdaq fell 0.07% to 5,651.39 at 1506 GMT.

The US economy grew 1.9% in the last quarter of 2016, missing estimates of 2.2%. This was a sharp fall from the 3.5% seen in the third quarter.

For the full year, the economy grew 1.6%, compared to 2.6% in 2015, the weakest performance since 2011.

The Federal Reserve’s preferred gauge of the economy, personal consumption price index increased 2.2%, while core prices, excluding food and energy, rose 1.3%.

Durable goods orders dipped 0.4% in December, analysts has expected a 2.5% increase, butt orders excluding transportation rose 0.5%, in line with the consensus forecast.

Investors are also eyeing a meeting between Prime Minister Theresa May and President Donald Trump later in the day as they begin work on a bilateral trade deal, once Britain leaves the European Union, with May also expected to stress the importance of Nato.

A joint press conference with the two world leaders will be held in Washington at 1800 GMT.

Michael Hewson, chief market analyst at CMC Markets, said: “This meeting will be notable for the fact that it is the first meet and greet for a foreign leader for the newly inaugurated US president, where the subject of trade is more than likely to come up. It will also set the tone for the potential future relationship between the two leaders, who couldn’t be more different in their global outlook. It will also give clues to other global leaders as to what America’s overseas priorities are likely to be in the months ahead.”

Meanwhile, oil prices retreated, with West Texas Intermediate down 1.2% to $55.57 a barrel and Brent crude 0.97% lower at $53.26.

In currency markets, the greenback rose 0.26% against the pound to 0.7961, and gained 0.49% against the yen to 115.09, but was down 0.27% versus the euro to 0.9336.

Hewson added: “The dollar looks set to close lower for the third week in succession, despite some evidence in the last day or so it might be recovering some of its mojo. It continues to gain ground against the Japanese yen, particularly since Japanese inflation remains very weak.”

In corporate news, Colgate-Palmolive tumbled 6.4% after the consumer goods firm missed fourth quarter profit forecasts, but earnings were in line with expectations.

Chevron fell 2.67% after missing quarterly earnings expectations, while American Airlines dropped 3% following news that its quarterly profit fell.

Google parent Alphabet was 1.2% under the cosh after its fourth-quarter earnings late on Thursday fell short of expectations.

Starbucks was 4.11% weaker after its same-store sales on Thursday also missed analysts’ expectations.

On the upside, software giant Microsoft gained 1.76% after its second-quarter results late on Thursday surpassed forecasts.

Honeywell International was up 0.71% despite news that the conglomerate’s revenue fell short of forecasts.