US pre-open: Futures fall on Fed speculation, but GDP beats forecasts
Stock futures on Wall Street declined on Thursday as investors shrugged off better-than-expected growth figures and continued to speculate about the first rate hike by the Federal Reserve.
By 08:50 in New York, futures on the S&P 500 and Nasdaq were down 0.4%, while the Dow Jones Industrial Average declined 0.3%.
US markets finished slightly lower on Wednesday after the Federal Open Market Committee voted to end its quantitative easing programme. While the decision came as no surprise and the Fed maintained its pledge to keep interest rates low for a "considerable time", analysts highlighted a hawkish tone to the accompanying statement.
Policymakers dropped their previous language describing the slack in the labour market as "significant" as they painted a more upbeat outlook for the economy, raising the possibility that rates could rise sooner than the markets currently expect.
Ahead of the opening bell on Thursday, the Commerce Department said that US gross domestic product (GDP) expanded at an annualised pace of 3.5% in the third quarter of 2014. This was down from the 4.6% growth seen in the second quarter but well ahead of the 3.1% expansion expected by the market.
Economist Paul Ashworth from Capital Economics said the GDP data "illustrates that the Fed was right to take a slightly more hawkish tone in yesterday's FOMC statement".
In other economic data, US jobless claims rose 3,000 to 287,000 last week. While this a surprise for analysts who had predicted a dip to 281,000, the four-week moving average fell slightly by 250 to 281,000.
Credit-card provider Visa was higher in pre-market trade after the drop in fourth-quarter profit wasn't as bad as analysts had feared. Sector peer MasterCard also impressed with its quarterly results.
Hazmat suit maker Lakeland Industries, which has been a high flier since the outbreak of the Ebola virus, was a further 40% on Thursday after the company announced it had ramped up manufacturing capacity.
Among the decliners were Kellogg after missing quarterly sales forecasts, while Kraft Foods disappointed with a fall in profits.