US open: Stocks fall as OECD lower US economic forecast

US stocks fell on Wednesday as oil prices dipped and the Organisation for Economic Co-operation and Development (OECD) lowered its US economic forecast.

At 1541 BST, the Dow Jones Industrial Average shed 0.46%, the S&P 500 lost 0.31% and the Nasdaq declined 0.15%.

Oil prices were lower on the prospect of rising production from major Middle East exporters ahead of the Organization of the Petroleum Exporting Countries meeting on Thursday.

West Texas Intermediate crude dropped 2.0% to $48.13 per barrel and Brent fell 1.7% to $49.02 per barrel at 1544 BST.

In its latest economic outlook, the OECD cut its forecast for US gross domestic product to 1.8% this year, compared to an estimate of 2.5% in November. GDP rose 2.4% last year.

In its wider assessment of the global economy the OECD said the recovery remains weak due to subdued trade and problems in emerging markets.

The OECD forecast global GDP growth of 3% in 2016, unchanged from last year, with "only a modest improvement foreseen in 2017".

Meanwhile, better-than-expected US manufacturing data failed to lift spirits. Markit’s final US manufacturing purchasing managers’ index came in at 50.7 in May, up from the flash estimate of 50.5 but down from 50.8 in April and pointing to the weakest performance since September 2009. A reading above 50 signals an expansion in sector activity while a level below that indicates a contraction.

ISM’s manufacturing index rose to 51.3 in May from 50.8, surprising analysts’ who had pencilled in a reading of 50.4.

US construction spending recorded its biggest decline in more than five years in April, the Commerce Department revealed. Construction spending fell 1.8% in April from a month ago, missing estimates for a 0.6% increase and following a 1.5% rise in March.

Elsewhere, the official China manufacturing PMI came in at 50.1 in May, unchanged from the previous month but slightly better than the reading of 50.0 economists were expecting

The official non-manufacturing PMI fell to 53.1 in May from 53.5 a month earlier.

The private Caixin China manufacturing PMI dropped to 49.2 in May from 49.4 in April, as expected, marking the 15th consecutive month of contraction. It was the lowest figure since February.

In corporate news, Under Armour was in the red after the sportswear maker cut its outlook for the year.

Michael Kors rallied after reporting fourth quarter revenue that beat analysts’ estimates.

Vera Bradley edged lower as it reported a 6.7% decline in quarterly same-store sales, blaming a drop in e-commerce sales.

In currencies, the dollar rose 0.49% against the pound, fell 0.42% against the euro and slid 1.13% versus the yen.