Stocks pulled back Friday after the Commerce Department reported that the economy grew at the slowest pace in more than three years and stirred concern that a soft landing in the economy might be elusive.
NEW YORK (AP) — Stocks pulled back Friday after the Commerce Department reported that the economy grew at the slowest pace in more than three years and stirred concern that a desired soft landing in the economy might prove elusive.
Investors have bid up stocks sharply in October on the notion that while the economy is slowing, but not in a way that would threaten corporate profits and consumer spending. Investors are also counting on a gradual slowdown to reduce the threat of inflation and convince the Federal Reserve to lower short-term interest rates.
While investors expected Friday’s advance reading on gross domestic product would show slowing growth, the report underscored concern that a cooling housing market could spill over into other parts of the economy.
“I think that the market actually was poised for profit-taking and consolidation,” said Quincy Krosby, chief investment strategist at The Hartford. She contends the GDP report gave investors an excuse to catch their breath after the recent run-up and called the pullback a healthy pause.
According to preliminary calculations, the Dow Jones industrial average was down 73.40, or 0.60 percent, at 12,090.26. The Dow Jones industrials achieved a new high close in each of previous four sessions, having also done so in 13 of the previous 18 sessions.
Broader stock indicators moved lower Friday. The Standard & Poor’s 500 index was down 11.74, or 0.85 percent, at 1,377.34, and the tech-heavy Nasdaq composite index fell 28.48, or 1.20 percent, to 2,350.62. Technology stocks fell Friday afternoon following a report from Goldman Sachs Inc. that warned of weakness in orders for computer parts.
Over all, all the major indices showed gains for the week.