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IBM ( IBM ) down after HashiCorp ( HCP ) deal, disappointing Q1 revenue

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Caterpillar ( CAT ) falls on downbeat Q2 sales forecast

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Indexes down: Dow 1.47%, S&P 1.43%, Nasdaq 2.14%

(Updated at 9:41 a.m. ET/1341 GMT)

By Shristi Achar A and Shashwat Chauhan

April 25 (Reuters) - U.S. stocks were sharply lower on

Thursday, dragged down by growth stocks after dour quarterly

results from Meta Platforms ( META ), while signs of persistent inflation

dampened hopes of the Federal Reserve cutting interest rates

anytime soon.

Meta plunged 14.7% after the Facebook-parent

forecast higher expenses and lighter-than-expected revenue.

Social media firms such as Snap and Pinterest ( PINS )

fell 4.2% and 4.9%, respectively.

Other growth stocks also came under pressure, with Alphabet

, Amazon.com ( AMZN ) and Microsoft ( MSFT ) down

between 4.3% and 4.5%.

Alphabet, Microsoft ( MSFT ) and Intel ( INTC ) are scheduled to

report their quarterly numbers on Thursday after markets close.

Adding to losses, U.S. economic growth slowed more than

expected in the first quarter, but an acceleration in inflation

suggested that the Fed would not cut interest rates before

September.

"The economy continues to grow, but at a slower pace and you

still have sticky inflation, that just means that the Fed is not

likely to cut in June and a big question mark for the remainder

of the year," said Peter Cardillo, chief market economist at

Spartan Capital Securities.

Separately, the number of Americans filing new claims

for

unemployment benefits

unexpectedly fell last week, pointing to still tight labor

market conditions.

Yield on the 10-year Treasury note rose to

multi-month highs after the data, last standing at 4.731%.

The data comes in ahead of the Personal Consumption

expenditures (PCE) index, the Fed's preferred inflation gauge,

on Friday.

Money markets are pricing in just about 36 basis points

of rate cuts from the Fed this year, down from about 150 bps

seen at the start of the year, according to LSEG data.

Communication services led losses across the major

S&P 500 sectors with an over 5% fall, while consumer

discretionary dipped close to 2%.

At 9:41 a.m. ET, the Dow Jones Industrial Average was

down 563.67 points, or 1.47%, at 37,897.25, the S&P 500

was down 72.69 points, or 1.43%, at 4,998.94, and the Nasdaq

Composite was down 336.28 points, or 2.14%, at

15,376.47.

Downbeat results from other companies also weighed on

equities.

International Business Machines ( IBM ) dropped 7.9% after

the firm said it will buy HashiCorp ( HCP ) in a deal valued at

$6.4 billion, and as its first-quarter revenue missed estimates.

Southwest Airlines ( LUV ) slid 9.6% after slashing its

estimates for new aircraft deliveries from Boeing ( BA ) in 2024

for the third time, saying it plans to undertake cost-cutting

measures to ease the resultant blow.

Caterpillar ( CAT ) lost 7.8% after the company said it

expects sales to fall in the second quarter as demand for its

construction equipment eases from last year's boom.

On the bright side, Royal Caribbean Group edged 0.4%

higher after the cruise operator raised its annual profit

forecast for a second time.

Declining issues outnumbered advancers for a 8.34-to-1 ratio

on the NYSE and for a 4.57-to-1 ratio on the Nasdaq.

The S&P index recorded nine new 52-week highs and four new

lows, while the Nasdaq recorded 10 new highs and 89 new lows.