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US close: Dow lower after Fed cut

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Date: Thursday 01 May 2008

LONDON (ShareCast) - US stocks dropped after the Federal Reserve cut rates and hinted that it could be at the end of its rate cutting policy.

The Dow Jones fell 11 points to 12,820, the S&P dropped 5 points to 1,385 while the tech laced Nasdaq slipped 13 points to 2,412.

The central bank cut rates by a quarter point to 2% and in its accompanying statement it said the economic outlook was not as weak as previously feared. The central bank is expecting to take a break from its rate cutting policy.

Meanwhile, the Commerce Department said gross domestic product grew better-than-expected at 0.6% in the first quarter, the same as the last quarter of 2007. The Chicago purchasing managers' index came in at 48.3 in April, instead of the expected 48.2.

In corporate news, General Motors reported a loss of $3.3bn in the first quarter but excluding special items the loss was less than expected.

Software maker SAP AG said its profit slipped in the first quarter but sales were higher, while media firm Time Warner reported lower quarterly earnings that missed estimates.

Consumer products maker Procter & Gamble reported higher quarterly earnings.