LONDON (ShareCast) - Worse than expected fourth quarter GDP figures got the US market off on the wrong foot.

US Gross Domestic Product (GDP) rose by an annualised 0.6% in the fourth quarter, after growing at an annualised rate of 4.9% in the third quarter. Economists had been expecting the fourth quarter growth figure to be around 1.1% or 1.2%.

The Dow-Jones 30 opens 54 points lower at 12,425, and the S&P Composite falls 7 points to 1,354. The NASDAQ Composite is 9 points easier at 2,348.

Internet search portal Yahoo! leads blue-chips lower as the market gets a chance to react to its results released after the close of trading yesterday. The fading web titan announced plans to shed 1,000 jobs as it continues to lose market share to Google and now also has to face up to the prospect of a slowdown in online advertising this year.

Drugs company Merck, currently embroiled in a controversy about one of its anti-cholesterol pills, falls back after taking a $4.85bn hit in its fourth quarter results for legal costs relating to its withdrawn painkiller Vioxx. Merck swung into loss in the fourth quarter, losing $1.63bn. Excluding the Vioxx charge, earnings per share came in 7 cents higher than market consensus at 80 cents.

Merrill Lynch gets the downgrade treatment from Oppenheimer, which said the broker has most to lose among investment banks and brokerages if a new wave of write-downs is triggered by the downgrading of the bond insurers by credit rating agencies. The two biggest bond insurers, MBIA and Ambac, are both under review by agencies Moody’s and Standard & Poor’s.

United Parcels unwrapped disappointing first quarter results in which earnings per share came in 5 cents below market consensus at 98 cents per share.

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