NEW YORK (Reuters) - Stock index futures pointed to a slightly weaker open on Wednesday following an unexpected contraction in fourth-quarter economic activity.
The first read showed gross domestic product fell 0.1 percent, far below expectations for growth of 1.1 percent. However, a read on private sector employment topped forecasts, with the ADP National Employment report showing 192,000 jobs added in January, higher than the 165,000 expectation.
Futures dipped modestly following the GDP data; previously, they had indicated a flat open for equity markets, which have surged in recent sessions.
"This is one chink in the armor of the recent better-than-expected economic indicators. This will make people start to get wary," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York. "If it turns out Sandy and the fiscal cliff were the reasons for (the contraction), people will shrug it off."
Deeper losses were prevented by a rise in both Boeing Co
Amazon.com Inc rose 8.8 percent to $283.30 in premarket trading a day after reporting better-than-expected fourth-quarter earnings and strong revenue growth. The rally put the stock within striking distance of an all-time high.
Boeing Co
Thomson Reuters data showed that of the 174 companies in the S&P 500 that have reported earnings this season, 68.4 percent have been above analyst expectations, which is a higher proportion than over the past four quarters and above the average since 1994.
S&P 500 futures fell 2.6 point and were about even with fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 18 points and Nasdaq 100 futures fell 3.25 points.
The S&P 500 has risen for nine of the past 10 sessions, putting it above 1,500, a level market technicians call an inflection point that will determine the overall direction in the near term. The benchmark index is on track to post its best monthly performance since October 2011 as investors poured $55 billion in new cash into stock mutual funds and exchange-traded funds in January, the biggest monthly inflow on record.
The Dow Jones industrial average has been flirting with 14,000, a level it hasn't seen since October 2007. Many analysts have said markets may need to take a pause at current levels.
The Federal Reserve concludes a two-day meeting on Wednesday, and while the central bank is expected to keep monetary policy on a steady path, intensive debates continue behind the scenes over when the controversial bond-buying program should be curtailed.
In company news, Chesapeake Energy Corp
U.S. stocks advanced on Tuesday, led by defensive sectors, in a sign the cash piles recently moving into the market are being put to use by cautious investors to pick up more gains.
(Editing by Chizu Nomiyama and Nick Zieminski)
Stock futures point to lower open after weak GDP read
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Stock futures point to lower open after weak GDP read
