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Alphabet, Microsoft ( MSFT ) and Intel ( INTC ) set to report after closing

bell

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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 1.21%, S&P 0.69%, Nasdaq 0.93%

(Updates to 2:57 PM ET)

By Chibuike Oguh

NEW YORK, April 25 (Reuters) - Wall Street stocks fell

on Thursday as markets were stunned by data showing

slower-than-expected U.S. economic growth and persistent

inflation coupled with a sell-off in large cap stocks triggered

by disappointing results from Meta Platforms ( META ).

Data on Thursday showed that the U.S. economy grew at

its slowest pace in nearly two years in the first quarter while

inflation accelerated, dampening hopes that the Federal Reserve

would begin cutting interest rates this year.

Disappointing results from Meta, whose shares are down 11%,

is also weighing on market sentiment. Three other Magnificent

Seven stocks, including Alphabet, Amazon.com ( AMZN )

and Microsoft ( MSFT ), are also down between 1.8% and 2.7%.

Equities in the communications sector, dragged down by Meta,

are currently the biggest losers in S&P 500, and are on

track for their biggest one-day decline since October. Other

categories of stocks losing ground are in real estate, consumer

discretionary, financials, healthcare and consumer staples.

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

report their quarterly numbers on Thursday after markets close.

"The GDP numbers definitely puts a ding in the paradigm that

markets were hanging onto for equities in terms of high growth;

and if you don't have high growth that will translate to

lower-than-expected earnings," said James St. Aubin, chief

investment officer at Sierra Mutual Funds in California.

At 02:57 p.m. the Dow Jones Industrial Average

fell 468.28 points, or 1.21%, to 37,993.75, the S&P 500

lost 35.07 points, or 0.69%, to 5,036.56 and the Nasdaq

Composite lost 146.69 points, or 0.93%, to 15,566.06.

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.

Separately, the number of Americans filing new claims for

unemployment benefits unexpectedly fell last week, pointing to

still tight labor market conditions. The March Personal

Consumption expenditures (PCE) index, the Fed's preferred

inflation gauge, is due on Friday.

"The double whammy was also the inflation number that

came in stronger than expected so there wasn't really a silver

lining in that report; it's still positive in absolute terms but

relative to high expectations it was disappointing," St. Aubin

added.

International Business Machines ( IBM ) fell 8.4% after it

announced a $6.4 billion deal to buy HashiCorp ( HCP ) alongside

its first-quarter results, in which revenue missed estimates.

Southwest Airlines ( LUV ) slid 9.1% as the carrier slashed

its projections for new aircraft deliveries from Boeing ( BA )

in 2024 for the third time.

Caterpillar ( CAT ) lost 6.4% after it cut second quarter

sales forecasts as demand for its construction equipment eases

from last year's boom.

Rising gold prices helped Newmont ( NEM ), the world's

largest bullion miner, to report first quarter profit that beat

estimates. Its shares were up nearly 13%.

Declining issues outnumbered advancers by a 2.66-to-1

ratio on the NYSE. There were 56 new highs and 76 new lows on

the NYSE. On the Nasdaq, 1,341 stocks rose and 2,765 fell as

declining issues outnumbered advancers by a 2.06-to-1 ratio.

The S&P 500 posted 13 new 52-week highs and seven new

lows while the Nasdaq recorded 33 new highs and 183 new lows.