Wall St. falls as economic growth stalls; Fed meeting eyed

(Reuters) - Stocks slipped on Wednesday after data showed that economic growth braked more sharply than expected in the first quarter, and ahead of the U.S. Federal Reserve's likely decision to maintain historically low interest rates.

U.S. gross domestic product grew just 0.2 percent at an annual rate in the quarter as harsh weather put off shoppers and energy companies cut spending.

The reading was the weakest in a year and lower than the 1.0 percent rate forecast by economists polled by Reuters.

Investors will closely examine the Fed's statement for clues on when rates are likely to be increased, as a batch of soft data could push back the timing of a hike until the end of the year. The statement is expected at 1400 p.m. EDT.

"I think the GDP data has to be taken with a grain of salt," said Chris Bertelsen, chief investment officer at Global Financial Private Capital in Sarasota, Florida, which oversees $4.5 billion in funds.

"We saw this movie last year where the first quarter was weak but followed up with a stronger second and third quarters and you're going to see the same pattern this year too."

In contrast to the weak GDP numbers, other data showed that contracts to buy previously owned U.S. homes rose in March to their highest level since 2013.

At 11:39 a.m. EDT the Dow Jones industrial average <.DJI> was down 76.64 points, or 0.42 percent, at 18,033.5, the S&P 500 <.SPX> was down 9.49 points, or 0.45 percent, at 2,105.27 and the Nasdaq Composite <.IXIC> was down 27.47 points, or 0.54 percent, at 5,027.95.

Earnings released on Wednesday painted a mixed picture.

"Corporate America is very, very busy trying to create earnings that justify the current pricing of the market," said Dave Heidel, regional investment manager at U.S. Bank Wealth Management in Minneapolis, which oversees $128 billion.

Heidel said the consequence of companies cutting costs to boost earnings reflects in the poor GDP numbers, which were partly due to low corporate spending.

Twitter dived 5.5 percent to $39.90, a day after the company cut its full-year forecast due to weak demand for its new direct response advertising.

MasterCard rose 2.6 percent to $92.63 after reporting a better-than-expected profit. The results also pushed up Visa 1.7 percent to $67.95, making it the biggest gainer among stocks in the Dow Jones Industrial Average.

Lumber Liquidators slumped as much as 21 percent to a three-year low of $26.54 after the hardwood flooring retailer said the Department of Justice is seeking criminal charges related to its imports from China.

Starwood Hotels rose 8.7 percent to touch a record high of $87.80 after it said it was exploring strategic and financial alternatives.

Declining issues outnumbered advancing ones on the NYSE by 1,993 to 937, for a 2.13-to-1 ratio on the downside; on the Nasdaq, 1,617 issues fell and 963 advanced for a 1.68-to-1 ratio favoring decliners.

(Editing by Savio D'Souza)