News that the economy slowed to just a 1.6% growth rate in the third quarter overshadowed solid results from Microsoft
and sent stocks skidding on Friday.
It was the weakest quarter for the U.S. economy since early 2003, and well below the 2.1% growth rate economists were looking for. Investment in equipment and software was a bright spot, growing 6.4% after a 1.4% decline the previous quarter.
Microsoft was unchanged on the day, as investors looked past weak December quarter guidance to next year’s highly anticipated Windows Vista release. Sun, meanwhile, gained 2.6% as investors shrugged off weaker than expected sales guidance to cheer the company’s narrowing loss.
A Goldman Sachs report on slowing motherboard demand hit chip stocks, with Intel
losing 3% each.
gained 6% on its results, and Netgear
, Digital River
surged on their earnings reports.
and Silicon Image
fell on their results.
The Nasdaq lost 28 to 2350, the S&P 500 fell 11 to 1377, and the Dow lost 73 to 12,090. Volume declined to 2.38 billion shares on the NYSE, and 2.27 billion on the Nasdaq. Decliners led 21-11 on the NYSE, and 20-10 on the Nasdaq. Downside volume was 74% on the NYSE, and 65% on the Nasdaq. New highs-new lows were 255-18 on the NYSE, and 167-39 on the Nasdaq.