This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Stocks Slip as Economy Shrinks

NEW YORK ( TheStreet) -- Major U.S. stock averages dipped Wednesday after the government said the economy contracted in the fourth quarter. Benchmark indices had touched multi-year highs.

The Dow Jones Industrial Average dropped 22 points, or 0.2%, to 13,933. The blue-chip index has booked gains in seven of the past nine sessions.

Breadth was negative, with losers outnumbering winners 21 to nine. Bank of America (BAC), 3M (MMM), General Electric (GE) and Exxon (XOM) were the biggest blue-chip decliners.

Boeing (BA), Intel (INTC) and Verizon (VZ) rose the most.

Boeing shares gained 1.3% after the aerospace giant beat fourth-quarter earnings estimates and said it sees "no significant financial impact" from the ongoing grounding and regulatory review of its showcase 787 jet.

The S&P 500 fell 6 points, or 0.4%, to 1,502. The Nasdaq was down 11 points, or 0.4%, to 3,142.

Most major sectors were off in the broader market, led lower by transportation, energy, capital goods and basic materials. The health-care and consumer non-cyclical sectors were the only gainers.

Volumes totaled 3.7 billion shares on the New York Stock Exchange and 2 billion shares on the Nasdaq. Decliners outpaced advancers by a ratio of 1.9-to-1 on the Big Board and 2.3-to-1 on the Nasdaq.

JJ Kinahan, chief derivatives strategist at TD Ameritrade, said many market observers were surprised at the rally at the market open because the headline gross domestic product number was so disappointing.

"I think there was just a little short squeeze there for a moment or two," he said. On the other hand, the market was also under some natural downward pressure, with the S&P 500 trading around 1,500 and the Dow approaching 14,000.

"Psychologically, they are big numbers," said Kinahan. At these levels, there is natural "resistance," which leads to selling pressure as traders start to take some profits and decide whether they want to reinvest money or sit on the sidelines to get a stronger signal on whether the market could break through those levels, Kinahan explained.

The Federal Reserve released its monetary policy announcement on Wednesday to little fanfare.

The central bank left interest rates unchanged at near-historic lows and noted that the economy "paused" in recent months, largely due to weather-related disruptions from Hurricane Sandy.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CHK $5.92 4.80%
FB $118.07 0.01%
AAPL $93.09 -0.57%
GOOG $697.75 0.29%
TSLA $213.00 -4.30%


Chart of I:DJI
DOW 17,690.09 +38.83 0.22%
S&P 500 2,057.30 +6.18 0.30%
NASDAQ 4,732.1250 +6.4860 0.14%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs