Tim Boyle/Bloomberg

Traders on the floor of the CME Group's Chicago Board of Trade on Jan. 25, 2012.

Traders on the floor of the CME Group's Chicago Board of Trade on Jan. 25, 2012. Photographer: Tim Boyle/Bloomberg

Jan. 27 (Bloomberg) -- Paul Hickey, co-founder of Bespoke Investment Group, talks about the prospects for financial stocks and the stock market. He speaks with Betty Liu and Dominic Chu on Bloomberg Television's "In the Loop." (Source: Bloomberg)

U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for a second day, after a report showed the world’s largest economy expanded less than forecast in the fourth quarter as consumers curbed spending.

Ford Motor Co. (F) slumped 4.2 percent as profit missed estimates on overseas challenges. Chevron Corp. (CVX), the second- largest U.S. energy company, slid 2.5 percent after reporting its biggest earnings decline in two years. T. Rowe Price Group Inc., the asset manager that has posted a profit every quarter since going public in 1986, dropped 2 percent as earnings fell. Banks in the S&P 500 rose 1.1 percent as optimism grew that Greece will reach an agreement with bondholders.

The S&P 500 decreased 0.2 percent to 1,316.33 as of 4 p.m. New York time. The benchmark gauge for American equities still capped a four-week gain. The Dow Jones Industrial Average retreated 74.17 points, or 0.6 percent, to 12,660.46 today.

“When we sneeze, the world catches a cold,” said Lawrence Creatura, who helps oversee $350 billion as a Rochester, New York-based fund manager at Federated Investors Inc. “Our health is very important. People’s main concern is not today’s GDP number, but what comes next. Did the Fed describe their tools very explicitly earlier in the week because it suspected GDP could be soft? The answer is probably yes.”

Equities fell on data showing that gross domestic product, the value of all goods and services produced, climbed at a 2.8 percent annual rate following a 1.8 percent gain in the prior quarter. The median forecast of 79 economists surveyed by Bloomberg News called for a 3 percent increase. Growth excluding a jump in inventories was 0.8 percent. The Federal Reserve this week signaled low rates through at least late 2014 and didn’t rule out bond purchases to bolster the economy.

The S&P 500 briefly rose as banks rallied after the Obama administration said it will relax rules on a loan-modification program and optimism grew that Greece will reach a debt- restructuring agreement with bondholders. Greek Finance Minister Evangelos Venizelos said the government was “one step away” from completing talks on a voluntary debt swap and was negotiating with international creditors on the terms for a second financing package at the same time.

“People don’t want to be too short going into the weekend because we may have some positive news out Greece,” Mark Bronzo, who helps manage about $24 billion at Security Global Investors in Irvington, New York, said in a telephone interview. “The positive news out of Greece from a credit standpoint helps people get more comfortable, which is always good for the banks,” he said.

The KBW Bank Index (BKX) of 24 stocks added 0.7 percent. Wells Fargo & Co. (WFC) rallied 1.9 percent to $29.60. Regions Financial Corp. (RF) increased 2.7 percent to $5.31.

The S&P 500 Automobiles & Components Index dropped 2.5 percent, the most among 24 industries. Ford slumped 4.2 percent to $12.21. In the fourth quarter, the Dearborn, Michigan-based automaker was hamstrung by a weakening European market and flooding in Thailand that wiped out profits in its Asian operations, Chief Financial Officer Lewis Booth said today.

Chevron slid 2.5 percent, the biggest decline in the Dow, to $103.96. Chief Executive Officer John Watson has been selling oil refineries and filling stations in Europe and Africa to focus on higher-profit crude production and gas-liquefaction projects.

T. Rowe Price (TROW) retreated 2 percent to $59.82. Net income decreased 1.7 percent to $188.4 million, or 73 cents a share, from $191.6 million, or 72 cents, a year earlier, the Baltimore- based company said today in a statement.

Juniper Networks Inc. (JNPR) slumped 3 percent to $21.69. The No. 2 maker of networking equipment declined after its first-quarter forecast missed estimates, a sign Internet providers are delaying network upgrades.

Solar shares gained as chief executive officers from Suntech Power Holdings Co. and Trina Solar Ltd. said China may double its installations of solar panels this year, absorbing excess production that depressed prices and margins in 2011. Suntech added 7.7 percent to $3.49. Trina rose 7.3 percent to $8.67. First Solar Inc. (FSLR) climbed 11 percent to $45.54 for the biggest gain in the S&P 500.

A gauge of homebuilders in S&P indexes advanced 0.7 percent. D.R. Horton Inc. (DHI) rallied 1.9 percent to $14.39. The largest U.S. homebuilder by volume reported a first-quarter profit that beat analyst estimates after a year-earlier loss as revenue from home sales rose.

Newell Rubbermaid Inc. (NWL) gained 8 percent to $18.82. The maker of Sharpie pens and Graco car strollers reported fourth- quarter earnings of 40 cents a share, excluding some items, beating the average analyst estimate of 38 cents.

Eastman Chemical Co. (EMN) rallied 7 percent to $50.41 after agreeing to buy Solutia Inc. (SOA) for about $4.7 billion, including debt, to drive expansion into higher-margin specialty plastics and chemicals. Solutia surged 41 percent to $27.52.

The S&P 500 is approaching the formation of a “golden cross” for the first time since 2010, historically a signal that more gains are likely to follow, Birinyi Associates Inc. said. Technical analysts, who study price charts to predict market moves, call it a “golden cross” when a 50-day average moves higher than a 200-day average while both are rising, and say it shows a pickup in momentum that may herald more gains.

The S&P 500 has produced 16 “golden crosses” since 1962, 75 percent of which were followed by positive returns in the next six months, with gains averaging 4.4 percent, according to Birinyi.

“While we choose to disagree with many of the technical analysts’ forecasts and predictions, we would be amiss to not analyze the historical performance and patterns following this market event,” Kevin Pleines, an analyst with the Westport, Connecticut-based firm, wrote in a note today. “We have found that this technical indicator has some merit.”

To contact the reporter on this story: Rita Nazareth in New York at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

(Blomberg)