Roundup: U.S. stocks drift lower on soft GDP report

U.S. stocks fell after volatile trading Friday, but still closed the month on a strong note, as data showed the U.S. economy returned to moderate growth in the fourth quarter of 2014.

The Dow Jones Industrial Average fell 81.72 points, or 0.45 percent, to 18,132.70. The S&P 500 lost 6.24 points, or 0.30 percent, to 2,104.50. The Nasdaq Composite Index dipped 24.36 points, or 0.49 percent, to 4,963.53.

U.S. real gross domestic product (GDP) expanded at a 2.2 percent annual rate in the fourth quarter of 2014, revised down from the advance estimate of 2.6 percent, according to the second estimate released by the Commerce Department Friday.

The revised-figure mainly reflected that the private inventory investment increased less than previously estimated, said the Commerce Department in a statement.

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

"Growth was sluggish in the fourth quarter, but because growth was 5.0 percent in the third quarter and averaged 3.5 percent in the second half, it really only matters if GDP growth remains sluggish in the first half of 2015," said Chris Low, chief economist at FTN Financial, in a note.

"The huge downward revision to inventories will result in upward revisions to the first quarter GDP estimates of a few tenths, though our estimate is still below 2 percent," Low said.

Other economic data came in mixed Friday. The Chicago Business Barometer plunged 13.6 points to 45.8 in February, the lowest level since July 2009 and the first time in contraction since April 2013, said the Institute for Supply Management-Chicago.

The Thomson Reuters/University of Michigan's February final reading of consumer sentiment index decreased from January's final reading of 98.1 to 95.4, but still beating market expectations.

The Pending Home Sales Index, a forward-looking indicator based on contract signings, climbed 1.7 percent to 104.2 in January from an upwardly revised 102.5 in December, reported the National Association of Realtors Friday.

In Europe, Greece was in the spotlight again as German lawmakers approved the extension of a Greek bailout program on Friday, although doubts about the Greek government's credibility prevail in Germany.

On corporate news, shares of J.C. Penney tumbled 6.80 percent to 8.50 U.S. dollars apiece as the retailer reported an unexpected loss of 59 million dollars in the fourth quarter of 2014, compared with a profit of 35 million dollars a year ago.

For the month, the three major indices rebounded strongly, with the Dow, the S&P 500 and the Nasdaq up 5.6 percent, 5.5 percent and 7.1 percent, respectively.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, decreased 4.10 percent to end at 13.34 Friday.

In other markets, oil prices rebounded as traders bought the dip after previous day's sharp decline.

Light, sweet crude for April delivery gained 1.59 dollars to settle at 49.76 dollars a barrel on the New York Mercantile Exchange (Nymex).

The dollar traded mixed against other major currencies, as data showed the U.S. economy returned to moderate growth in the fourth quarter of 2014.

In late New York trading, the euro fell to 1.1193 dollars from 1.1199 dollars in the previous session, while the dollar bought 119.68 Japanese yen, higher than 119.44 yen of the previous session.

Gold futures on the COMEX division of the Nymex rose as data showed the U.S. gross domestic product rose less than expected.

The most active gold contract for April delivery rose 3 dollars, or 0.25 percent, to settle at 1,213.10 dollars per ounce. Endite