LONDON (Alliance News) - US equities are set to open marginally lower Wednesday, as investors digest the latest tranche of quarterly trading statements released after the Wall Street close on Tuesday, and ahead of some important US macroeconomic data and the latest Federal Open Market Committee policy meeting decisions.
"US markets look set to open lower Wednesday as earnings from Twitter and eBay after the close yesterday pointed to lower-than-expected future growth," says Jasper Lawler, market analyst at CMC Markets.
Online retailer eBay posted a net loss of USD2.3 billion, or USD1.82 per share, in the first quarter, compared with net income of USD677 million in the same quarter last year. Although its quarterly earnings per share, excluding items, as well as quarterly revenue came in above analysts' expectations, the company's second-quarter guidance was weak.
Meanwhile, Twitter posted a net loss of USD132 million, or USD23 cents per share, in the first quarter, compared to a net loss of USD27 million in the same period last year. The company also issued 2014 revenue guidance that was lukewarm.
Twitter is down 13% in pre-market trading, while eBay is down 4.3%.
"Also playing into today's cautious approach from investors is likely to be the amount of important data releases lined up, not to mention the FOMC decision later on," says Craig Erlam, market analyst at Alpari.
"We've just come off two very good days, it is only logical to lock in some profits when there is GDP and ADP employment data and a central bank decision to come," he adds.
Ahead of the New York bell, the NASDAQ Composite is called to open down 0.3%, while the DJIA and S&P 500 are indicated to open marginally lower.
ADP employment change is released at 1215 GMT. Economists' expectations are for the reading, which is often regarded as indicative of the highly anticipated non-farm payrolls data released later in the week, to show that the private sector to have added 210,000 jobs compared to the 191,000 jobs added in March.
The preliminary reading of US first quarter GDP is published at 1230 GMT. This is "widely expected to be disappointing after the deep-freeze US winter," said Michael Hewson, chief market analyst at CMC Markets. An annualised reading of 1.2% is expected, down from 2.6% in the fourth quarter of last year.
The Chicago purchasing managers' index is released at 1345 GMT.
Later in the day, the US Federal Open Market Committee publishes its latest interest rate and monetary policy decisions at 1800 GMT.
In the UK, stocks continue to trade mixed. The FTSE 100 is up 0.2% at 6,786.08, the FTSE 250 is down 0.5% at 15,820.14, and the AIM All-Share index is up 0.8% at 822.28.
At the individual stock level, GlaxoSmithKline has just released its results for the first quarter of 2014. The drugs giant reported a drop in revenue and net profit for the quarter due to asset sales and a decline in sales of pharmaceuticals in the US, but the company also raised its dividend and reiterated its full-year profit guidance despite making its sales guidance more vague.
Its net profit fell to GBP668 million in the three months to end-March from GBP961 million a year earlier, as revenue declined to GBP5.61 billion from GBP6.47 billion. That was mainly due to asset sales and masked lower costs that resulted from its restructuring programme.
The company is is currently one of the biggest fallers in the blue-chip index, down 1.4%.
By James Kemp; jameskemp@alliancenews.com; @jamespkemp
Copyright 2014 Alliance News Limited. All Rights Reserved.
Glaxosmithkline (GSK)