U.S. stocks slipped on Tuesday as worry over Europe's debt crisis and weaker U.S. economic growth than previously thought kept selling pressure on for a fifth straight session.
The U.S. economy grew at a 2 percent annual rate in the third quarter, down from the government's prior estimate of 2.5 percent one month ago.
The data on gross domestic product comes after a sharp selloff in stocks spurred by worries about debt problems in the United States and Europe pushed the benchmark S&P 500 down nearly 6 percent over the past week.
We are still driven by macro issues right now, said Scott A. Armiger, portfolio manager at Christiana Trust in Greenville, Delaware.
This preliminary reading was supposed to be right on the number -- 2.5 percent -- as the estimate a month ago, so that is a little disappointing.
Spain's short-term borrowing costs hit a 14-year high on Tuesday as political uncertainty about a solution to the euro zone's sovereign debt crisis punished another vulnerable southern European country.
Late Monday, the two leaders of a special U.S. congressional committee said the panel failed to reach a deal on reducing government deficits. Investors are worried the stalemate will make it more difficult to pass extensions of measures like payroll tax cuts that could help stimulate the economy.
The Dow Jones industrial average <.DJI> dropped 72.77 points, or 0.63 percent, to 11,474.54. The Standard & Poor's 500 Index <.SPX><.INX> lost 7.39 points, or 0.62 percent, to 1,185.59. The Nasdaq Composite Index <.IXIC> fell 16.56 points, or 0.66 percent, to 2,506.58.
The S&P has fallen through a key support level at 1,200 and was once again struggling to maintain 1,187, seen as the next technical support, representing the 61.8 percent retracement of the 2011 high to low.
Trading volume is likely to be thin this week as global uncertainties and the U.S. Thanksgiving holiday keep many investors on the sidelines.
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(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)