Wall Street slumps after early growth

Wall Street stocks slumped Friday on persistent concerns over economic recovery, erasing early gains following data showing a stronger-than-expected US growth in the final quarter of last year.

The Dow Jones Industrial Average fell 53.13 points (0.52 percent) to 10,067.33, posting losses in five of the last seven sessions.

The Nasdaq composite dipped 31.65 points (1.45 percent) to 2,147.35 while the Standard & Poor’s 500 index slipped 10.66 points (0.98 percent) to 1,073.87.

All three key indexes were up in early trading as the market initially cheered a government report showing the US economy roaring to life in the fourth quarter with a 5.7 percent growth rate on the back of brisk business spending to replenish inventories.

The Commerce Department figures showed growth accelerated from the 2.2 percent pace in the third quarter, when the economy expanded for the first time after four quarters of contraction and the worst recession in decades.

But the gains began evaporating two hours after the opening bell.“On balance, the fourth quarter GDP report was encouraging as it showed stronger growth versus the prior quarter and little inflation pressure,” said Patrick O’Hare of Briefing.com.

But he noted that the report failed to convince the market that the economy is out of the woods.“With the unemployment rate at 10.0 percent, misgivings about the sustainability of the upturn will remain,” he said.

-AFP