Stocks Dip on Revised GDP; Fed's View Curbs Loss

NEW YORK (Reuters) - U.S. stocks fell on Tuesday on lackluster economic data in a session marked by low volume and choppy trading, but losses eased after the Federal Reserve raised its expectations for growth in 2010.

Stocks fell early in the session as revised government data on gross domestic product showed the U.S. economy grew at a slower-than-expected pace in the third quarter.

Hewlett-Packard Co shares led the Dow industrials lower a day after the technology bellwether said in its results that the U.S. economy remained challenging.

With the S&P 500 up 22 percent so far this year, investors were struggling to justify additional gains after a series of middling economic reports.

However, the downbeat mood was tempered after the Fed revised upward its growth expectation for 2010, while minutes of the FOMC's most recent meeting showed officials are increasingly confident about a durable recovery for the U.S. economy.

"You're getting the cross-current of weak revisions to third-quarter data matrixed against the Fed increasing the growth estimates for the economy for the next year," said Jim Awad, managing director at Zephyr Management in New York.

"But the action in the market is moderate going into the holiday weekend and I wouldn't read too much into it."

The U.S. stock market will be closed on Thursday in observance of Thanksgiving Day. On Friday, it will be open for only half a day due to the holiday.

The Dow Jones industrial average <.DJI> dropped 17.24 points, or 0.16 percent, to end at 10,433.71. The Standard & Poor's 500 Index <.SPX> inched down just 0.59 of a point, or 0.05 percent, to 1,105.65. The Nasdaq Composite Index <.IXIC> fell 6.83 points, or 0.31 percent, to 2,169.18.

Hewlett-Packard Co fell 1.6 percent to $50.19 a day after the blue-chip computer and printer maker reported a quarterly profit that matched its preliminary results, but said the economy remained challenging.