Stocks Fall on Stronger GDP

[Dr. Jack]

Stocks Fall on Stronger GDP

By ELLEN SIMON, AP Business Writer

NEW YORK - Stocks slipped in early trading Tuesday as traders fretted over stronger-than-expected economic growth that could prompt the
Federal Reserve to continue raising short-term interest rates.

The market declined after the revised fourth-quarter gross domestic product showed the economy grew at an annual rate of 1.6 percent, much better than the 1.1 percent the
Commerce Department initially estimated and beating the 1.5 percent economists predicted. The
GDP is the broadest measure of the economy's performance.

Stocks also seem to be hitting "resistance levels." The Dow Jones industrial average and Standard & Poor's 500 indexes have been flirting with 4 1/2 year highs, but those levels have become, effectively, a ceiling for stock prices. In some recent sessions, investors have sold off stocks when the indexes neared those highs.

In the first hour of trading, the Dow Jones industrial average fell 34.34, or 0.31 percent, to 11,063.21.

Broader stock indicators also fell. The Standard & Poor's 500 index fell 5.72, or 0.44 percent, to 1,288.40, and the Nasdaq composite index fell 6.18, or 0.27 percent, to 2,301.

Bonds edged higher, with the yield on the 10-year Treasury note falling to 4.58 percent from 4.59 percent late Monday. The U.S. dollar was lower against other major currencies in European trading. Gold prices also dropped.

Crude oil futures fell. A barrel of light crude was quoted at $60.89, down 11 cents, in electronic pre-opening trading on the New York Mercantile Exchange.

H.J. Heinz Co., one of the world's largest food producers, fell 55 cents to $37.05 after its fiscal third-quarter earnings missed analysts' expectations, falling 24 percent because of high costs related to downsizing and divestitures.

Staples Inc. rose 68 cents to $23.75 after its fourth-quarter profit rose 15 percent, beating Wall Street expectations by a penny.

The Russell 2000 index of smaller companies fell 3.23, or 0.44 percent, to 737.40.

Overseas, Japan's Nikkei stock average rose for the fourth straight session, edging 0.08 percent higher. In afternoon trading, Britain's FTSE 100 was down 0.85 percent, Germany's DAX index was down 0.89 percent, and France's CAC-40 was down 0.73 percent.