January 29, 2010 / 5:51 PM / in 8 years

US STOCKS-Wall St falters as fiscal worry offsets data

* Euro-zone fiscal problems spur some risk aversion

* Q4 GDP data, other economic reports help cushion market

* Apple and Microsoft lead tech sector’s decline

* Dow up 0.2 pct, S&P 500 up 0.1 pct; Nasdaq off 0.3 pct

* For up-to-the-minute market news, click [STXNEWS/US] (Updates to midday, changes byline)

By Ellis Mnyandu

NEW YORK, Jan 29 (Reuters) - U.S. stocks retreated to near breakeven in choppy trade on Friday, paring earlier strong gains as worries about fiscal troubles buffeting Europe offset reassuring reports on the U.S. economy.

Traders said investors were fretting about the impact of fiscal risks swirling around Europe where Greece, Portugal and Spain’s fiscal positions are under intense scrutiny.

“There’s a lot of concerns going on as far as the sovereign debt is concerned in a lot of the nations, specifically in the euro zone,” said David Lutz, managing director of trading at Stifel Nicolaus Capital Markets in Baltimore. “But even the U.S. credit default swaps have hit a seven-month high overnight.”

Earlier in the session, the major U.S. stock indexes rose more than 1 percent after a trio of reports showed the U.S. economy grew at a much stronger-than-expected pace during the fourth quarter, while consumer sentiment and Midwestern business activity also improved in January.

But the broader market lost ground by midday as investors sold off shares of such technology bellwethers as Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and International Business Machines Corp (IBM.N).

Apple was on track to break a string of 10 months of gains on Friday, two days after the company unveiled its newest portable computer, the iPad. The semiconductor index .SOXX fell 2.5 percent.

The Dow Jones industrial average .DJI rose 19.57 points, or 0.19 percent, to 10,140.03. The Standard & Poor’s 500 Index .SPX inched up 0.62 of a point, or 0.06 percent, to 1,085.15. The Nasdaq Composite Index .IXIC slipped 6.04 points, or 0.28 percent, to 2,172.96.

Shares of Apple lost 2 percent to $195.32 and ranked as the heaviest weight on the Nasdaq, while Microsoft’s stock fell 2.2 percent to $28.53.

Big manufacturers, including Boeing Co (BA.N), as well as the energy and materials sectors fell, weighing on both the Dow and the S&P 500. Boeing dropped 1.9 percent to $61.36.

Before the opening bell, Wall Street got a shot of adrenaline when the U.S. Commerce Department reported that the U.S. economy grew at an annual pace of 5.7 percent in the fourth quarter, much higher than the 4.6 percent growth forecast by a Reuters poll. The first estimate of the nation’s output in the last three months of 2009 put gross domestic product growth at its fastest pace since the third quarter of 2003, according to the Commerce Department.

Other data showed January consumer sentiment rose more than expected to hit a two-year high, and business activity in the U.S. Midwest expanded more than forecast in January. For details on Friday’s data, see [ID:nN28246399] (Reporting by Ellis Mnyandu; Editing by Jan Paschal)

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