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Stocks slip after US economic growth disappoints

In this Aug. 30, 2011 file photo, 2011 Chevrolet Malibus are lined up at a car dealership in San Jose, Calif. The U.S. economy grew at a 2.8 percent annual rate in the final three months of last year, the fastest growth in 2011, according to the Commerce Department, Friday, Jan. 27, 2012. Americans spent more on cars and trucks, and companies restocked their shelves at the strongest pace in nearly two years. But growth in the October-December quarter - and all of last year - was held back by the biggest annual government spending cuts in four decades. (AP Photo/Paul Sakuma, File)

 

NEW YORK (AP) -- Stocks were drifting lower Friday after the government reported the U.S. economy grew at a slower pace than economists had expected in the fourth quarter.

If prices don't reverse, the Dow Jones industrial average will end the week down, the first time that's happened in 2012. The Dow has risen for three weeks in a row and is up 4 percent this year.

The Dow fell 80 points, or 0.6 percent, to 12,656 at noon. The S&P 500 index fell 4 points to 1,314. The Nasdaq composite edged up 5 to 2,810.

The Commerce Department said the economy grew at a 2.8 percent annual rate in the final three months of last year. Economists had expected 3 percent growth.

Among stocks making big moves, Chevron Corp. fell 3 percent, the most of the 30 stocks in the Dow average, after the energy company's fourth-quarter revenue and earnings per share came in well below what analysts were expecting. Oil and natural gas production declined in the quarter.

The declines were broad, with all ten sectors of the S&P down.

Ford Motor Co. fell 3 percent after reporting disappointing fourth quarter earnings due to weak sales in Europe. The company said its results were also hurt by trouble at parts suppliers in Thailand due to flooding there.

Starbucks Corp. fell 2.6 percent after reporting late Thursday that that full year results were likely to come in less than expectations. Procter & Gamble Co., which makes Tide, Crest and other consumer products, fell 1 percent after cutting its earnings outlook.

Legg Mason fell 6 percent after the investment management company's earnings fell in half as clients pulled money out of the firm. Legg Mason's earnings of 20 cents per share were well below the 25 cents per share that analysts were expecting, according to FactSet.

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