A trader works on the floor of the New York Stock Exchange. Photo / Getty Images
A trader works on the floor of the New York Stock Exchange. Photo / Getty Images
The US dollar strengthened while Wall Street pared losses after Federal Reserve policy makers said they expect the recent slowdown in growth to be "transitory."
"The committee views the slowing in growth during the first quarter as likely to be transitory and continues to expect that, with gradual adjustments inthe stance of monetary policy, economic activity will expand at a moderate pace, labour market conditions will strengthen somewhat further, and inflation will stabilise around 2 per cent over the medium term," the Federal Open Market Committe said in a statement released after its two-day meeting.
"Near-term risks to the economic outlook appear roughly balanced," it noted.
The FOMC kept its target interest rate steady in a unanimous decison. It has previously signalled plans for two more rate hikes this year.
"They went out of their way to emphasise this is not something they see persisting and pretty much says to me that their two rate hikes are still on the table for the balance of the year," Heidi Learner, chief economist at Savills Studley, told Reuters.
Meanwhile, the latest US jobs data were better than anticipated. An ADP Research Institute showed private employers added 177,000 jobs in April, above economists' expectations and up from a downwardly revised 255,000 jobs in March.
"Despite a dip in job creation, the growth is more than strong enough to accommodate the growing population as the labour market nears full employment," Ahu Yildirmaz, co-head of the ADP Research Institute, said, Bloomberg reported.
"Looking across company sizes, midsized businesses showed persistent growth for the past six months."
In 2.56pm trading in New York, the Dow Jones Industrial Average was steady. The Nasdaq Composite Index dropped 0.5 per cent. In 2.42pm trading, the Standard & Poor's 500 Index slid 0.2 per cent.
In the Dow, slides in shares of Walt Disney and those of DuPont, down 2.5 per cent and 1.1 per cent respectively, offset gains in shares of Chevron and those of Mobil Exxon, recently up 1.4 per cent and 1 per cent respectively.
Shares of Apple traded 0.1 per cent weaker at US$147.41 as of 2.49pm in New York. Earlier in the day it fell as low as US$144.27 after its latest quarterly results disappointed with a surprise decline in iPhone sales.
Near-term risks to economic outlook appear roughly balanced.
"There is a general softening in phone demand to contend with as well as expectations of a big upgrade, all of which softens the blow of this quarter's miss," James McQuivey, a Forrester Research analyst, told Reuters. "If we see Apple downplaying expectations before the next upgrade cycle, it might mean that the company isn't confident it will beat those expectations."
Shares of Bunge slumped after the US agricultural trader posted disappointing quarterly earnings and downgraded its full-year forecast for its agribusiness unit as well as its food and ingredients unit. The stock traded 10.6 per cent weaker as of 1.07pm in New York.
"The slow pace of farmer selling in South America compressed margins in Agribusiness and led to a lower than expected first quarter," Soren Schroder, Bunge's chief executive officer, said in a statement. "Despite this difficult start, we continue to expect 2017 to be a year of solid year-over-year earnings growth, although below our prior expectations."
In Europe the Stoxx 600 Index ended the day with little change from the previous close. Germany's DAX Index rose 0.2 per cent. Meanwhile, France's CAC40 Index slipped 0.1 per cent, while the UK's FTSE 100 Index declined 0.2 per cent.
