LONDON (ShareCast) - US equities remain in the doldrums ahead of today’s interest rate decision from the Federal Reserve. Worse than expected fourth quarter GDP figures set the tone early, and not even encouraging news on the labour market could shake off the gloom.

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%.

Meanwhile, payroll service group ADP’s employment survey indicates that 130,000 private sector jobs were added in January, after a revised 37,000 upswing in December. The figure was three times higher than pundits had been expecting.

The Dow-Jones 30 share index is down 36 at 12,443 and the NASDAQ Composite is 6 points lower at 2,351. The S&P Composite sheds 3 points to 1,358.

Company results have generally added to the downbeat mood.

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pills, falls back after taking a $4.85bn hit in its fourth quarter results for legal costs relating to its withdrawn painkiller Vioxx.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.

Photography giant Eastman Kodak retreats despite posting its third consecutive quarterly profit. Net profit from continuing operations in the three months to end-December was $92m, versus a loss on the same basis of $15m in the final quarter of 2006.

In contrast, aircraft maker Boeing is flying high after it exceeded analysts’ estimates with its fourth quarter earnings. Fourth quarter earnings rose to $1.03bn from $989m a year earlier. Earnings per share (EPS) climbed to $1.36 from $1.29 in the fourth quarter of 2006. Analysts had been expecting EPS of $1.32.

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. The company also advised that 2008 earnings growth will be at the low end of its original forecast.

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