Stocks dip on revised GDP; Fed's view curbs loss
U.S. stocks fell on Tuesday on lackluster economic data in a session marked by low volume and choppy trading, but losses eased after the Federal Reserve raised its expectations for growth in 2010.
Stocks fell early in the session as revised government data on gross domestic product showed the U.S. economy grew at a slower-than-expected pace in the third quarter.
Hewlett-Packard Co
With the S&P 500 up 22 percent so far this year, investors were struggling to justify additional gains after a series of middling economic reports.
However, the downbeat mood was tempered after the Fed revised upward its growth expectation for 2010, while minutes of the FOMC's most recent meeting showed officials are increasingly confident about a durable recovery for the U.S. economy.
You're getting the cross-current of weak revisions to third-quarter data matrixed against the Fed increasing the growth estimates for the economy for the next year, said Jim Awad, managing director at Zephyr Management in New York.
But the action in the market is moderate going into the holiday weekend and I wouldn't read too much into it.
The U.S. stock market will be closed on Thursday in observance of Thanksgiving Day. On Friday, it will be open for only half a day due to the holiday.
The Dow Jones industrial average <.DJI> dropped 17.24 points, or 0.16 percent, to end at 10,433.71. The Standard & Poor's 500 Index <.SPX> inched down just 0.59 of a point, or 0.05 percent, to 1,105.65. The Nasdaq Composite Index <.IXIC> fell 6.83 points, or 0.31 percent, to 2,169.18.
Hewlett-Packard Co
HP also said it saw growth in its share of U.S. enterprise personal computers, which is rival Dell Corp's
Financial stocks showed weakness throughout the session. JPMorgan Chase & Co
Zephyr Management's Awad said there is concern about banks' capital after news that the Fed asked lenders that were part of its stress tests to submit plans to repay government money.
U.S. home prices rose in September, according to the Standard & Poor's/Case-Shiller index, but the increase was less robust than forecast. Home prices for that month were unchanged, according to a separate report from the U.S. Federal Housing Finance Agency.
The Dow Jones U.S. Home Construction Index <.DJUSHB> fell 1.7 percent.
Volume was light on the New York Stock Exchange, where only about 952 million shares changed hands, far below last year's estimated daily average of 1.49 billion. On the Nasdaq, about 1.87 billion shares traded, well below last year's daily average of 2.28 billion.
Declining stocks outnumbered advancing ones on the NYSE by a ratio of about 8 to 7. On the Nasdaq, about three stocks fell for every two that rose.
(Reporting by Rodrigo Campos; Editing by Jan Paschal)
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