By Tanya Agrawal
REUTERS - U.S. stocks fell sharply in early afternoon trading on Wednesday, led by health insurers after Humana reported an unexpected pick-up in hospital admissions in March and April.
Nine out of the 10 major S&P 500 sectors were down, with the health index's 1.2 percent fall being the steepest.
Humana shares fell 7 percent to $168.28, making them the second biggest loser on the S&P 500. The insurer's statement also hit shares of rivals Aetna, Anthem and UnitedHealth, whose 4.5 percent fall to $112.33 made it the biggest drag on the Dow.
As harsh weather put off shoppers and energy companies cut spending, U.S. economic growth braked more sharply than expected in the first quarter, data showed, reinforcing expectations for a gradual pace of interest rate rises by the Federal Reserve.
Investors were also awaiting the Fed's statement, expected at 1400 p.m. EDT (1800 GMT), for clues on when rates are likely to be increased.
"People are speculating that we are in a low patch after growing well over the last year and the pace and momentum going in to the second quarter doesn't seem to be as strong as people expected," said Omar Aguilar, chief investment officer at Charles Schwab Management in San Francisco.
At 13:18 EDT (1718 GMT) the Dow Jones industrial average was down 118.75 points, or 0.66 percent, at 17,991.39, the S&P 500 was down 13.61 points, or 0.64 percent, at 2,101.15 and the Nasdaq Composite was down 43.21 points, or 0.85 percent, at 5,012.22.
Higher oil prices also pushed down airline stocks, with United Continental falling 5 pct to $58.45, American Airlines declining 5.7 percent to $48.30, Delta slipping 3.7 percent at $44.51 and Southwest Airlines Co dropping 4 percent to $40.24.
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 6.5 percent to $39.50, a day after the company cut its full-year forecast due to weak demand for its new direct response advertising.
MasterCard rose as much as 3.7 percent to a record of $93.59 after reporting a better-than-expected profit. The results also pushed up Visa 0.8 percent to $67.30.
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 certain imports.
Declining issues outnumbered advancing ones on the NYSE by 2,106 to 859, for a 2.45-to-1 ratio on the downside; on the Nasdaq, 1,826 issues fell and 839 advanced for a 2.18-to-1 ratio favoring decliners.
(Additional reporting by Caroline Valetkevitch and Sinead Carew; Editing by Savio D'Souza)
