Stocks Falter Despite Giddy GDP

NEW YORK (TheStreet) -- Stocks slumped on January's last trading day despite Friday's robust fourth-quarter GDP growth and a slew of strong earnings reports. The major averages put in their worst month since February 2009.

Stocks erased earlier gains made on a strong GDP report as U.S. indices finished the week -- and the month -- in the red.

The Dow Jones Industrial Average shed nearly 106 points this week, or 1% and finished the month 1% lower. The S&P 500 lost 18 points, or 1.6%, on the week and slumped 3.7% this month while the Nasdaq surrendered 58 points, or 2.6%, weekly and lost 5.5% in January.

On Friday, the Dow Jones Industrial Average lost 53 points, or 0.5%, to close at 10,067. The S&P 500 shed 11 points, or 1%, at 1074 and the Nasdaq finished down by 32 points, or 1.5%, at 2147.

"Despite earnings, markets have been taking their cues from overseas all week -- whether it's been concerns about China or Greece -- there's been a lot of questions about where growth is going to come from," said Mike Sokoll, director of Nasdaq OMX's market intelligence desk. "So even though we had a strong GDP number today, market gains didn't hold. I think perhaps people are wondering whether this is just stimulus juice and whether growth can hold up."

>>Microsoft Sees Lower IT Spending

The tech sector led the declines, with key tech stocks among the Dow's worst performers. Microsoft, Boeing(BA) and Intel(INTC) were the day's biggest duds, with Hewlett-Packard(HP) and IBM(IBM) not far behind.

"Tech has been one of the market's leading sectors, so they're a likely place to take profits," Sokoll added.

Shares of Microsoft(MSFT), Sirius XM Radio(SIRI), Qualcomm(QCOM) and Intel were seeing heavy volume on the Nasdaq, with only Sirius trading in green territory.

An 8% decline in Microsoft's business sales appeared to spark fears that weak enterprise spending could flatten future technology growth.