Jan 27, 2012 02:08PM

Stocks Face First Loss in 3 Weeks

By Chris Dieterich And Christian Berthelsen Stocks fell, jeopardizing chances for a fourth consecutive weekly gain, after a reading on domestic economic growth fell short of expectations.The Dow Jones Industrial Average was down 78 points, or 0.6%, to 12656, in midafternoon trading Friday. The Standard & Poor's 500 fell 3.7 points, or 0.3%, to 1315, and the Nasdaq Composite Index rose five points, or 0.2%, to 2811. The nation's gross domestic product, the value of all goods and services produced, expanded at an annual rate of 2.8% from October to December, up from 1.8% in the third quarter. Though the data showed the U.S. economy expanded at the fastest pace since the second quarter of 2010, the reading fell short of the expected 3% rate.U.S. growth is expected to slow in the first half of 2012, and having the economy work from a weaker point than had been anticipated, particularly after disappointing data Thursday on leading economic indicators and new housing sales, gave investors pause, said Alan Gayle senior investment strategist at RidgeWorth Investments in Atlanta. "That was not the news the market wanted going into the weekend," Mr. Gayle said. "If we start from a lower-than-expected starting point, then that only raises concerns about how much growth we can get." The selloff abated briefly Friday morning after the University of Michigan's latest report on consumer sentiment was better than expected and better than the month before, but stocks resumed their fall shortly afterward. The S&P 500 was led lower by the energy and consumer-discretionary sectors. Chevron fell the most among blue chips, down 2.3% after the company announced refining profits fell in the fourth quarter as margins suffered from higher oil prices and weak fuel demand. In Europe, the Stoxx Europe 600 fell 1%, as the cost of insuring Portugal's debt against default climbed to a record. Traders remained cautious despite claims that Greece was close to a deal with private creditors to restructure its debt.Asian bourses were mostly higher, with Hong Kong's Hang Seng Index rising 0.3%. Japan's Nikkei was down 0.1%. Gold futures edged up 0.1%, to $1,734.10 a troy ounce, while crude-oil prices were off 0.3%, at $99.41 a barrel. The dollar lost ground against the euro and the yen.In corporate news, Procter & Gamble fell 0.8% after the consumer-products company reported fiscal second-quarter earnings that exceeded forecasts, but lowered its full-year outlook citing unfavorable exchange rates. Ford Motor lost 4% after the auto maker's fourth-quarter earnings missed estimates, as a result of slower sales in Europe and production losses caused by the flooding in Thailand, although revenue came in above expectations. Starbucks fell 1.5% after the coffee seller's fiscal first-quarter earnings and revenue exceeded expectations, but its second-quarter earnings outlook was below forecasts. Juniper Networks slumped 2.7% after the company missed fourth-quarter earnings and revenue estimates, and provided a downbeat outlook for the current quarter. Riverbed Technology shed 18% after the maker of networking gear topped fourth-quarter expectations, but provided a disappointing current-quarter outlook. Seagate Technology advanced 5.1% after the hard-disk-drive maker raised its quarterly dividend 39 cents a share and increased its stock-repurchase program by $1 billion. KLA-Tencor rose 4.6% after the semiconductor-equipment maker reported fiscal second-quarter earnings and revenue at the high end of its outlook. Solutia soared 40% after the specialty-chemicals company said it agreed to be acquired by Eastman Chemical in a cash-and-stock deal valued at about $3.38 billion. Eastman Chemical climbed 5%. ...