The U.S. Department of Commerce announced that the gross domestic product grew at a 2.6 percent annual rate in the fourth quarter.
The Commerce Department previously predicted 2.4 percent growth, while economists were closer to the mark, with 2.7 percent growth expected.
But the even keeled GDP results and positive consumer spending trends were not enough to compensate for concerns about global uncertainty and a large drop in Citigroup Inc. stock after its capital plan was rejected by the Federal Reserve.
“People are reducing their risk portfolios a little bit,” John Fox, director of research at Fenimore Asset Management told Bloomberg. “Some of the speculative parts of the market have been selling off. If you own a stock and the reason you own it is it’s going up and it stops going up, there’s no reason to own it.”
The Standard & Poor’s 500 was down five points today, to 1,847. The Dow Jones Industrial Average was down 11 points, to 16,257. And the Nasdaq Composite was down 25 points to 4,148.
The largest local declines this morning were ManpowerGroup (down 98 cents to $76.77) and Snap-On Inc. (down 86 cents to $110.18).
“Consumer spending reached 3.3 percent in the final quarter of 2013, the fastest rate for several years, a reflection of the improvement in the underlying economic fundamentals, and this bodes well for the remainder of this year,” said Joseph Lake, a U.S. analyst for The Economist Intelligence Unit, in a market note. “This is an important, encouraging trend as consumer spending accounts for almost 70 percent of the economic activity and, generally, tends to power the rest of the economy.”
