Stocks closed modestly lower, but well above intra-day lows, as the tech sector incurred the heaviest losses on fears of Chinese interest rate hikes.
The Dow Jones Industrial Average shed 2.49 points, or 0.02 percent, to close at 11,822.80. The S&P 500 index lost 1.66 points, or 0.13 percent, to 1,280.26. The NASDAQ composite tumbled 21.07 points, or 0.77 percent, to 2,704.29.
A robust report on China’s GDP prompted fears that China would eventually have to boost interest rates to cool down an overheating economy. Companies with significant exposure to China, like EI DuPont de Nemours & Co. (NYSE: DD) and Caterpillar (NYSE: CAT) dropped 1.55 percent and 2.02 percent, respectively.
On the flipside, Morgan Stanley (NYSE: MS) jumped 4.58 percent after posting strong quarterly results.
Economic data in the U.S. was generally good.
The Labor Department said that the number of people filing for unemployment insurance fell by 37,000 (lower than expected) to 404,000 last week.
Also, the National Association of Realtors said sales of existing homes rose 12 percent in December to a seasonally adjusted annual rate of 5.28 million, much higher than expected.
The Philadelphia Fed index slipped slightly in December, while an index of Leading Economic Indicators rose more than expected in December.
Commodity prices dropped -- Oil futures sank 2.20 percent while gold fell 1.79 percent.
Bonds fell a bit as the 10-year yield rose to 3.46 percent.