US stocks fall after weak GDP data
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NEW YORK, Jan 30 AFP
January 31 2013, 09:11AM
US stocks have closed modestly lower after data showed the economy unexpectedly shrank in the fourth quarter last year and the Federal Reserve maintained its loose monetary policy.
The Dow Jones Industrial Average dropped 44.77 points (0.32 per cent) to 13,909.65.
The S&P 500-stock index shed 5.95 points (0.39 per cent) at 1,501.89, while the tech-rich Nasdaq Composite fell 10.94 points (0.35 per cent) to 3,142.72.
"Equities began the day on a mixed note, but the slightly bearish bias which persisted throughout the day caused the major averages to end near their lows," Briefing.com analysts said in a client note.
Before the opening bell, the Commerce Department reported the US economy shrank at an annual rate of 0.1 per cent in the 2012 fourth quarter.
Hours later, the Federal Reserve, wrapping up a two-day policy meeting, dismissed the contraction as "transitory", noting the economy had "paused" in recent months.
The Fed stayed the course on its ultra-loose monetary policy as expected, saying growth should be moderate moving head.
"Today was far from a normal Fed-day as the FOMC announcement followed a GDP release that was negative for the first time in 13 consecutive quarters," said Jon Ogg of 24/7WallSt.com.
On the Dow, ExxonMobil and General Electric shed 1.2 per cent, Alcoa lost 0.9 per cent and 3M was down almost 1.0 per cent.
Boeing led the small pack of blue-chip gainers, rising 1.3 per cent.
The aerospace giant reported a sharp fall in fourth-quarter earnings, as expected, and put fixing the battery problem that led to the global grounding of its 787 Dreamliner as its first priority for 2013.
Canadian-based Research in Motion slumped 12.0 per cent after launching its new BlackBerry smartphone and announcing it would change its corporate name to BlackBerry.
Amazon jumped 4.8 per cent after the online retailer late on Tuesday posted quarterly earnings that showed wider margins.
Facebook rose 1.5 per cent ahead of its fourth-quarter results released after the markets closed.
Shares were down nearly three per cent after the social network giant reported a dive in fourth-quarter profit from a year ago, to $US64 million ($A61.47 million).
Natural-gas producer Chesapeake Energy surged 6.0 per cent after the company announced that its embattled chief executive Aubrey McClendon would retire.
Bond prices fell - the yield on the 10-year US Treasury rose to 2.01 per cent from 1.99 per cent late on Tuesday, while the yield on the 30-year bond increased to 3.20 per cent from 3.17 per cent.
Bond prices and yields move inversely.