NEW YORK (MarketWatch) � Financial stocks dropped on Wednesday after data showed the U.S. economy contracted in the fourth quarter.
The Financial Select Sector SPDR Fund XLF , which tracks financial stocks in the S&P 500 SPX , dropped 0.3% in afternoon trade.
Click to Play Dow on the cusp of 14,000MarketWatch's Polya Lesova joins the News Hub to discuss the strength of the markets as the Dow Jones Industrial Average nears 14,000. GDP numbers for the fourth quarter are due and January's ADP came in high.
Before the market opened, the Commerce Department estimated that U.S. gross domestic product fell at a 0.1% annual rate, while economists had expected a 1% rise in GDP. Read: Economy shrinks in fourth quarter.
Separate data showed that private-sector payrolls rose by 192,000 in January, which was better than analysts expected. Read: ADP shows improving labor market in January.
In Washington, the Federal Reserve Open Market Committee concluded its first meeting of the year on Wednesday, saying it will continue its bond-buying program.
The committee said in a statement that growth will proceed at a moderate pace and the unemployment rate will gradually decline. Read: Fed holds easing stance, says growth has �paused�.
In the financial sector, shares of Goldman Sachs Group Inc. GS , , Morgan Stanley MS �and J. P. Morgan Chase & Co. JPM �all edged higher on the news, while Bank of America Corp. BAC �and Citigroup Inc. C �shares fell.
Piper Jaffray Cos. PJC �shares gained 1% after the investment bank said it swung to a fourth-quarter profit. Read: Piper Jaffray swings to fourth-quarter profit.
Net revenue jumped 51% to $140.9 million. Piper Jaffray provides investment banking, institutional brokerage, asset management and other financial services to businesses and institutional investors.
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