US stocks fell on Friday after a report showing fourth-quarter US economic growth was below Wall Street forecasts raised concerns about the strength of the recovery and prompted investors to lock in recent gains.
Gross domestic product rose at a 4 percent annual rate in the 2003 quarter, less than half the third-quarter's 8.2 percent pace as consumers cut back spending. Wall Street economists had forecast a 4.8 percent rate of increase.
"It's just further evidence that people may have gotten ahead of themselves on thinking how good things were going to get," said Edgar Peters, chief investment officer at PanAgora Asset Management. "This just gives people an excuse to take profits."
The Dow Jones industrial average ended down 22.22 points, or 0.21 percent, at 10,488.07.
The Standard & Poor's 500 Index fell 2.98 points, or 0.26 percent, to 1,131.13.
The technology-laced Nasdaq Composite Index slipped 2.08 points, or 0.10 percent, to 2,066.15.
For the week, the Dow fell 0.8 percent, the S&P 500 slipped 0.9 percent and the Nasdaq dropped 2.7 percent.
In January, the Dow rose 0.3 percent, the S&P 500 gained 1.7 percent and the Nasdaq gained 3.1 percent.
According to the "January Barometer" devised by economist Yale Hirsch, stocks tend to follow for the year the direction set in January.
Only four times since 1950 have stocks ended the year lower after the S&P 500 gained in January.
On Friday, news of an unexpected loss at grocery chain Winn-Dixie Stores Inc and the suspension of its dividend weighed on the market. Gilead Sciences Inc was another disappointment when sales of its key HIV drug, Viread, were reported to be not as strong as hoped.
That offset a jump in Gateway Inc, which said it would buy profitable competitor eMachines Inc.
Winn-Dixie fell after posting its loss, dropping $2.53, or 28 percent, to $6.56, making it the biggest percentage loser on the New York Stock Exchange.
Nortel Networks Corp topped the NYSE's lists of most actively traded and biggest percentage gainer stocks.
It posted stronger-than-expected fourth-quarter earnings and its first full-year profit since 1997 after Thursday's close.
Shares of Nortel leaped $1.25, or 19 percent, to $7.82.
Personal computer maker Gateway rose 15 percent after it said it would buy eMachines Inc. for $266 million. Gateway rose 63 cents to $4.72.
Gilead slumped even after it reported higher fourth-quarter earnings on Thursday, yet disappointed investors hoping for stronger sales of Viread. Shares of Gilead fell $5.88, or 9.7 percent, to $54.81 and ranked as the Nasdaq 100's biggest percentage loser.
Volume was heavy with 1.64 billion shares traded on the New York Stock Exchange and 1.92 billion on the Nasdaq. Despite the drop in the indexes, advancers outnumbered decliners on the NYSE and Nasdaq.
The market's decline this week started on Tuesday and accelerated on Wednesday after the Federal Reserve indicated that it might be closer to a rate hike.
"This week's fall back was probably mostly a technical correction more than anything else," Peters said. "The Fed announcement wasn't really a fundamental shift, everybody just treated it as one.