The stock market closed lower after climbing in early trading as enthusiasm over the U.S. Gross Domestic Product (GDP) faded and the signs of risk aversion returned.

The S&P 500 Index closed at 1,073.79, down 10.74 points, or 0.99 percent. The Dow Jones Industrial Average lost 0.55 percent to trade at 10,054.61 and the tech heavy Nasdaq Composite Index plunged 1.45 percent to close at 2,147.35.

Tech stocks once again led the decline for the market. Microsoft (Nasdaq:MSFT), despite reporting record earnings last night, was the biggest decliner of the Dow, dropping 3.36 percent. Rival Apple (Nasdaq:AAPL) also plunged, losing 3.60 percent.

Basic materials stocks also suffered as confidence in the economy waned. The Dow Jones U.S. Basic Materials Index dropped 2.49 percent.

During the morning session, the S&P 500 initially surged to a high above 1096 as Wall Street responded favorably to the GDP report.

Similarly, European shares rallied in anticipation of the GDP and continued to rally shortly afterwards. However, optimism began fading around 10:30 am New York time, as both the German DAX and UK FTSE 100 Index began to reverse their gains, although both indices managed closed up for the day.

The Chicago Board of Exchange's Volatility Index, VIX, which measures the implied volatility of S&P 500 options, rallied from a low of 22.1 percent at 10:34 am to trade at 24.6 around 3:00 p.m.

Yields for U.S. Treasury securities of various maturities also peaked around the opening of the New York session and then dropped lower. Lower yields indicate that investors are bidding up the price of Treasury securities. Investors consider them as safe haven assets.

The U.S. gross domestic product, which grew at an annual rate of 5.7 percent in the fourth quarter of 2009, rose at the fastest pace since 2003, according to a government report released today at 8:30 a.m.

Private business shed inventories by $33.5 billion in the fourth quarter versus a reduction of $139.2 billion in the third quarter. While private inventories are still decreasing on an absolute level, they are decreasing at a dramatically slower pace.

The U.S. Department of Commerce counted this slowing reduction as growth; of the 5.7 percent growth in GDP, 3.4 percent was attributed to this change in private inventories.

The report also showed that consumption rose at a slower pace in the fourth quarter and the consumption of durable goods decreased 0.9 percent.