After trading flat most of the day, the Dow Jones Industrial Average dipped in the late afternoon, finishing down 44 points, or 0.3%. Releasing its interest rate decision at 2:15 PM, the Federal Reserve said that economic growth was fading, though temporarily, and that it would continue buying $85 billion worth of government bonds a month to keep interest rates low and stimulate the economy. The Fed also held its promise to continue the stimulus until unemployment reaches 6.5%, or inflation increases substantially.
Earlier in the day, news that GDP contracted by 0.1% in the fourth quarter also left the market with a sour taste in its mouth. While the figure marks the first time growth has gone negative since 2009, the dip was partially caused by a drop in government spending and a decrease in business inventories, and is not indicative of a recession. Economists had expected GDP to grow 1% in the quarter.
There was some good news out of ADP's unemployment report, however. The payroll processor said in its monthly employment report that 192,000 jobs were added in January, ahead of expectations of 175,000. The official employment report from the Labor Dept. comes out Friday, with 180,000 as the projected number of new jobs.
Turning to individual stocks, Boeing led Dow components, with a gain of 1.3%, after topping estimates. The aerospace giant posted a profit of $1.28, against expectations of $1.19, but slightly down from a year ago. Its 2013 forecast notably assumed no significant impact form the battery problems with its 787 Dreamliner jets, and the company said it expects earnings of $5 to $5.20 this year. Addressing the battery concerns, management said fixing the problem is its number one priority. It has continued to build the planes, even as deliveries and flights have been suspended.
Reporting earnings after hours, Facebook said its mobile ad revenue doubled, and overall revenue grew by 40%. Adjusted earnings a share came in at $0.17, ahead of estimates of $0.15, and up from $0.14 a year ago. Still, the social network seemed to be a victim of high expectations. Shares have gained 70% in less than three months and were up 1.5% during the session, before falling 3.4% after the report came out.
Finally, Research in Motion got rocked after releasing its long-awaited Blackberry 10 operating system, which will be available on two new models. Shares tumbled 12%, as the phone doesn't appear to be the savior that some investors had hoped it would be. The market seemed to be bothered by the lack of apps on the phones, and the fact that they won't be available in the U.S. until March and April. The company also said it would change its name to Blackberry.
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