Stocks Decline in Back-And-Forth Session

The Commerce Department's gross domestic product report showed the economy grew at a 0.6 percent annual pace in the final quarter last year unchanged from an estimate a month ago. The growth was down sharply from the 4.9 percent rate seen in the prior quarter.

Investors remain uncertain about what is in store for the economy and the troubled financial sector but the sense of panic that emanated from the near-collapse of Bear Stearns Cos. at the start of last week has lessened, observers say.

"GDP was in line so we're still expanding even though we're expanding at a very small rate," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams. "It's definitely a different mind-set than it was two weeks ago. A lot of smart people are telling us to buy on the dips. I think we'll be fine as long as there is not another Bear Stearns out there."

In midafternoon trading, the Dow Jones industrial average fell 69.60, or 0.56 percent, to 12,353.26.

Broader stock indicators also fell. The Standard & Poor's 500 index declined 7.23, or 0.54 percent, to 1,333.90, and the technology-heavy Nasdaq composite index fell 28.35, or 1.22 percent, to 2,296.01, hurt by Oracle's decline.

Declining issues narrowly outpaced advancers on the New York Stock Exchange, where volume came to 851.4 million shares.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.50 percent from 3.46 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude rose $2.18 to $108.08 on the New York Mercantile Exchange as investors grew uneasy about Iraqi oil output after the bombing of key pipeline in that country.

While investors appear less cautious than after the Federal Reserve helped orchestrate the sale of the liquidity-starved Bear Stearns to JPMorgan Chase & Co., there were also fresh signs of strain in the economy.