US stocks fell today after data showed the US economy grew less than expected in the fourth quarter, while weak earnings from Ford and continued caution over Europe's debt crisis also weighed on the market.
US gross domestic product expanded at its fastest pace in more than a year in the fourth quarter of 2011, the Commerce Department said, but missed forecasts. A strong rebuilding of inventories and weak spending on capital goods hinted at slower growth this year.
"Today's GDP numbers while positive indicate that the economy is not really doing all that well and (Federal Reserve) chairman Bernanke's extreme policy may be in fact what's needed," said Michael Sheldon, chief market strategist at RDM Financial, Westport, Connecticut.
"I wouldn't be surprised to see some profit-taking at any time, given the recent rally we've had."
Ford Motor Co shares fell 5.5 per cent to $12.04 after the carmaker reported a lower-than-expected fourth-quarter profit on higher commodity costs and losses in Europe and Asia.
The Dow Jones industrial average was down 37.31 points, or 0.29 per cent, at 12,697.32. The Standard & Poor's 500 Index slipped 1.47 points, or 0.11 per cent, at 1,316.96. The Nasdaq Composite Index was up 3.55 points, or 0.13 per cent, at 2,808.83.
Euro zone finance officials voiced optimism a deal to avert a disorderly Greek default was imminent and key building blocks to resolve Europe's sovereign debt crisis were gradually fitting into place. Renewed concern about the crisis has troubled markets this week.
A rally from late last year that has pushed the S&P 500 up 23 per cent from lows in October has left the index facing tough resistance at around the 1,330 level, which marks a four-year downtrend line from its all-time highs in 2007.
Oliver Pursche, president at Gary Goldberg Financial Services in Suffern, New York, cautioned against reading too much into recent market strength.
He cited a "volatile environment," in which "there are plenty of global issues that can derail the global economy."
Eastman Chemical Co offered to buy specialty chemical maker Solutia Inc for about $3.38 billion in cash and stock to extend its reach in emerging markets, particularly the Asia-Pacific region. Solutia shares rose 41 per cent to $27.59.
Reuters
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