NEW YORK – U.S. stocks sold off Friday after data showed third-quarter U.S. economic growth was the weakest in more than three years and a Goldman Sachs report prompted investors to unload some shares of Intel Corp. (INTC) and other semiconductor companies.
The Dow Jones industrial average slid 73.40 points, or 0.60 percent, to end at 12,090.26, its worst one-day drop in a month. The Standard & Poor's 500 Index fell 11.74 points, or 0.85 percent, to finish at 1,377.34. The Nasdaq Composite Index dropped 28.48 points, or 1.20 percent, to close at 2,350.62.
Shares of companies whose performance is closely tied to changes in the economy were among the biggest losers, including Caterpillar Inc. (CAT), the heavy equipment maker, and Wal-Mart Stores Inc. (WMT), the world's largest retailer.
Among the Dow's biggest losers, Caterpillar topped the list and Wal-Mart was second.
Intel and other semiconductor companies slid on the Nasdaq after a Goldman Sachs report said demand for "motherboards," a key computer hardware component, is falling.
The stock market pulled back after two weeks of gains. The Dow Jones industrial average has hit a new closing record high in 13 of the past 18 sessions. For the year, the Dow is up about 13 percent so far.
"The stock market reaction is not a surprise," said Jason Schenker, U.S. economist at Wachovia Corp. in Charlotte, North Carolina. "We are coming from big gains, but the GDP report showed the economy is walking on a tight rope and obviously, if growth is going to slow, corporate profits may shrink as well."
Both the Dow and the S&P 500 had their worst one-day drop since Sept. 6. Still, all three major U.S. stock indexes rose for the week. The Dow was up 0.7 percent, followed by a 0.6 percent rise in the S&P 500. The Nasdaq advanced 0.4 percent.
Intel, the world's largest chip maker, lost 3.1 percent, or 67 cents, to $21.10 on the Nasdaq. Shares of rival Advanced Micro Devices Inc. (AMD) fell 3 percent, or 64 cents, to $20.86 on the New York Stock Exchange.
Caterpillar's stock fell 1.7 percent, or $1.08, to $61.27, while Wal-Mart's shares slid 2 percent, or $1.02, to $50.73 on the NYSE.
Before the opening bell, the government said GDP, which measures total economic activity within U.S. borders, expanded at an annual rate of 1.6 percent during the third quarter — much slower than the 2.2 percent rate economists had expected and below the second quarter's annualized rate of 2.6 percent.
Shares of Ingersoll-Rand Co. (IR) fell 3.7 percent, or $1.45, to $37.45 after the diversified conglomerate posted lower quarterly earnings and said fourth-quarter results will fall bellow Wall Street's expectations.
Still, Chevron Corp. (CVX), the No. 2 U.S. oil company, rose after it reported stronger-than-expected quarterly profit on improved refinery margins and high oil prices. Its shares rose 0.3 percent, or 18 cents, to $68.14 on the NYSE.
Stocks showed little reaction to a report from the University of Michigan that its consumer sentiment index rose to a stronger-than-expected reading of 93.6 in October, up from 85.4 in the previous month.
Volume was active on the NYSE, where about 1.56 billion shares changed hands, slightly below last year's daily average of 1.61 billion. On the Nasdaq, about 2.27 billion shares were traded, above last year's daily average of 1.80 billion.
Decliners outnumbered advancers on both the Big Board and the Nasdaq by about 2 to 1.