Reports on GDP, consumer confidence tug at stock prices

NEW YORK -- Stocks drifted below 13-month highs after a lackluster reading on consumer confidence and a report showing slower economic growth sapped some of the market's optimism.

Major indexes posted modest losses Tuesday, as drops in financial and industrial stocks were tempered by gains in health care companies. The Dow Jones industrial average fell 17 points a day after jumping by 133.

Stocks pulled off their lows of the day after the Federal Reserve released minutes from its latest rate-setting meeting, during which it pledged to keep rates low for the foreseeable future and said inflation remained at bay. The Fed raised its expectations for economic growth during the second half of this year, but said unemployment will remain high.

Stocks had been falling prior to the report after the government revised its calculation of third-quarter economic growth down to 2.8 percent from its original estimate of 3.5 percent, the latest sign that the recovery is likely to be slow and bumpy.

Meanwhile, the Conference Board said its Consumer Confidence Index rose to 49.5 in November from a revised reading of 48.7 in October. While better than expected, the report shows that consumers remain gloomy heading into the holiday season. A reading above 90 means the economy is on solid footing.

"It's all about the daily data," said Howard Ward, chief investment officer of the GAMCO Growth Fund. "Today's was uninspiring."

Ward said a warning from China's central bank that commercial banks there should control their lending also weighed on the market, financial stocks in particular. The comments raised concerns that the government could take more measures to reduce liquidity in the system in the coming months, which would be an impediment to growth in one of the biggest trade partners of the U.S.

The market's modest moves came after a big rally on Monday carried the Dow Jones industrials up 133 points to their highest level in just over a year. A weakening dollar and an upbeat report on housing lured investors back into stocks after a three-day losing streak.

According to preliminary calculations, the Dow fell 17.24, or 0.2 percent, to 10,433.71. The Standard & Poor's 500 index fell 0.59, or 0.1 percent, to 1,105.65, while the Nasdaq composite index fell 6.83, or 0.3 percent, to 2,169.18.