The Dow was on track to post the first weekly loss this year on Friday as lackluster earnings from blue-chip companies and weaker-than-expected data on U.S. economic growth disappointed investors.
The Dow fell as Chevron Corp
The Commerce Department said U.S. gross domestic product expanded at its fastest pace in 1-1/2 years in the last quarter of 2011, but the 2.8 percent rise fell short of economists' expectations.
In addition, a strong rebuilding of inventories and weak spending by businesses in the GDP report pointed to slower growth early this year, denting recent optimism about an improving economy.
Larry McMillan, president of McMillan Analysis Corp, said that after only four down days in January, the stock market is overbought.
A short-term correction should begin almost immediately. But the intermediate-term bullish trend should be able to reassert itself, McMillian said.
In company news, Facebook plans to file documents as early as Wednesday for a highly anticipated initial public offering that will value the world's largest social network at between $75 billion and $100 billion, according to the Wall Street Journal, which cited unidentified sources.
The Dow Jones industrial average <.DJI> was down 44.39 points, or 0.35 percent, at 12,690.24. The Standard & Poor's 500 Index <.SPX> was up 0.85 point, or 0.06 percent, at 1,319.28. The Nasdaq Composite Index <.IXIC> was up 14.76 points, or 0.53 percent, at 2,820.04.
But losses were curbed as U.S. Federal Reserve statements this week and economic data kept investors alert for the possibility of another round of monetary stimulus known as quantitative easing, or QE3.
Out of what the Fed said, you can expect some negative numbers because the Fed obviously saw what the GDP numbers are and they anticipate a slowdown, said Sean Kraus, chief investment officer at CitizensTrust in Pasadena, California.
If the Fed does resort to QE3 to stimulate growth, investors don't want to be caught flat-footed and be out of risky assets, Kraus said.
Chevron, the No. 2 U.S. oil company, fell 2.3 percent to $104.10 and was the biggest drag on the Dow. The NYSEArca oil index <.XOI> lost 0.7 percent.
Consumer product company Procter & Gamble dipped 0.9 percent to $64.25.
Ford Motor Co
Network equipment makers Juniper Networks Inc
According to Thomson Reuters data, 59 percent of 184 S&P 500 companies reporting earnings through Friday have topped analysts' estimates, below the beat rate of about 70 percent seen at this stage of earnings season in recent quarters.
Utilities were the worst performing among S&P sectors after results from American Electric Power Co Inc
Eastman Chemical Co
Negotiations between Greece and its private creditors on a debt swap deal made progress on Friday and will continue over the weekend, a senior Greek government official said. Renewed concern about the crisis has troubled markets this week.
(Reporting By Angela Moon; additional reporting by Doris Frankel; Editing by Kenneth Barry)