Roundup: U.S. stocks tumble on disappointing GDP data

U.S. stocks slumped after a choppy session Friday, with the three major indices notching their biggest monthly losses in a year, as the U.S. government announced the economy grew lower in the final quarter of 2014.

The Dow Jones Industrial Average fell 251.90 points, or 1.45 percent, to 17,164.95. The S&P 500 shed 26.26 points, or 1.30 percent, to 1,994.99. The Nasdaq Composite Index dipped 48.17 points, or 1.03 percent, to 4,635.24.

The U.S. real gross domestic product (GDP) expanded at an annual rate of 2.6 percent in the fourth quarter of 2014, below market expectations, said the Commerce Department Friday.

The economy grew 5 percent in the third quarter and 4.6 percent in the second quarter after contracting in the first three months of the year. In the whole 2014, the economy expanded 2.4 percent, compared with an increase of 2.2 percent in 2013.

The department said the decelerated GDP growth in the fourth quarter mainly reflected an upturn in imports, a downturn in federal government spending and deceleration in nonresidential fixed investment.

However, consumer spending, which accounts for more than two- thirds of U.S. economy activity, increased at a 4.3 percent pace in the fourth quarter, compared with 3.2 percent in the third quarter 2014.

"Households are benefiting from cheaper oil and a stronger dollar already, but as we expected, the negative impact on companies, both on exports and investment, depressed GDP in the fourth quarter and likely will again in the first quarter of 2015. GDP should reaccelerate after that, but weakness early in the year could keep the Federal Reserve liftoff at bay until the third quarter of 2015," said Chris Low, chief economist at FTN Financial, in a note.

In corporate news, Google shares rose 4.67 percent to 534.52 U. S. dollars apiece Friday after the tech giant reported its fourth- quarter revenue increased 15 percent to 18.10 billion dollars from a year ago.

Amazon shares surged 13.71 percent to 354.53 dollars apiece after the U.S. e-commerce giant posted a better-than-expected profit of the fourth quarter.

Shares of Alibaba decreased 0.81 percent to 89.08 dollars apiece Friday after the previous day's plunge on worse-than- expected quarterly earnings.

Latest data from Thomson Reuters showed that S&P 500 companies' per-share earnings in the fourth quarter are expected to grow 5.3 percent year on year, while revenue growth is forecast to increase 1.6 percent.

For the week, Wall Street registered the fourth weekly drop out of past five, with the blue-chip Dow falling 2.9 percent, and the broader S&P 500 dipping 2.8 percent while the tech-heavy Nasdaq down 2.6 percent.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, increased 11.78 percent to end at 20.97 Friday. In other markets, the dollar traded mixed against other currencies amid downbeat economic data.

In late New York trading, the euro lost to 1.1293 dollars from 1.1313 dollars of the previous session, and the dollar bought 117. 51 Japanese yen, lower than 118.40 yen of the previous session.

Oil prices jumped as traders expected that low prices would slow production. Light, sweet crude for March delivery gained 3.71 dollars to settle at 48.24 dollars a barrel on the New York Mercantile Exchange (Nymex), while Brent crude for March delivery moved up 3.86 dollars to close at 52.99 dollars a barrel.

Gold futures on the COMEX division of the Nymex bounced back after a report showed weaker-than-expected U.S. economic growth.

The most active gold contract for April delivery rose 23.3 dollars, or 1.86 percent, to settle at 1,279.2 dollars per ounce. Endite