November 24, 2009 / 5:09 PM / 9 years ago

REFILE-US STOCKS-Wall St weighed by GDP, home prices data

(Refiles to replace “Growth” with “Gross” in paragraph 2. The error also occurred in an earlier story)

* U.S. GDP grows 2.8 pct in Q3, below forecast

* Home prices up in Sept, but at slower-than-expected pace

* HP says economy challenging, shrs fall

* For up-to-the-minute market news, click [STXNEWS/US]

(Updates to late morning, changes byline)

By Angela Moon

NEW YORK, Nov 24 (Reuters) - U.S. stocks fell on Tuesday, a day after the Dow hit a 13-month high, after data showed the economy grew in the third quarter, but at a slower rate than expected.

Gross domestic product (GDP) expanded 2.8 percent, rather than the 3.5 percent pace the government estimated last month. While the data could signal an end to the recession, investors are looking for more robust growth to justify additional stock gains after a 22 percent rise in the S&P 500 this year.

U.S. home prices rose in September, according to the Standard & Poor’s/Case-Shiller index, but at a much less robust rate than forecast. The Dow Jones U.S. Home Construction index .DJUSHB fell 2 percent. For details, see [ID:nN24296971]

“The economic growth in the third quarter was a bit disappointing, mainly because it was related to consumers. It raised concerns on what’s already an issue for investors ... the pace of recovery in consumer spending going into the holiday season,” said Jeff Kleintop, chief market strategist for LPL Financial in Boston.

The Dow Jones industrial average .DJI was down 51.92 points, or 0.50 percent, at 10,399.03. The Standard & Poor’s 500 Index .SPX fell 4.34 points, or 0.39 percent, at 1,101.90. The Nasdaq Composite Index .IXIC dropped 13.08 points, or 0.60 percent, at 2,162.93.

The market trimmed losses at midmorning after the Conference Board reported the U.S. consumer confidence index rose to 49.5 in November, above expectations of 47.7. [ID:nN24300840]

The technology-heavy Nasdaq was pressured by Hewlett-Packard Co (HPQ.N), which fell 1.8 percent to $50.09 a day after it reported a quarterly profit that matched its preliminary results, but said the economy remained challenging. [ID:nN23242457]

Financial stocks also weighed on Wall Street on increased worries that Chinese banks, under government pressure to shore up their finances, are set to unleash billions of dollars in capital raising that could strain equities markets.

Both the S&P 500 financial sector .GSPF fell about 1 percent, and the KBW Bank Index .BKX was down 0.7 percent.

JPMorgan Chase & Co (JPM.N) dipped 2.2 percent at $42.33 and Bank of America Corp (BAC.N) fell 1.1 percent to $16.11.

On the upside, Medtronic Inc (MDT.N) gained 5.4 percent to $42.46 and Dollar Tree Inc (DLTR.O) rose 4.7 percent to $51.42 after both companies reported quarterly earnings that topped expectations. [ID:nN23263230] and [ID:nN23261485]

Reporting by Angela Moon; editing by Jeffrey Benkoe

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