Stocks fall back after growth prompts Fed rethink

STEVE ROTHWELL
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A technician checks the bell podium of the New York Stock Exchange, Thursday, Nov. 7, 2013. Twitter set a price of $26 per share for its initial public offering on Wednesday evening and will begin trading Thursday under the ticker symbol "TWTR" in the most highly anticipated IPO since its Silicon Valley rival's Facebook 2012 debut. (AP Photo/Richard Drew)

NEW YORK (AP) — Stocks pulled back from record levels Thursday morning as investors bet that faster growth in the U.S. would increase the likelihood that the Federal Reserve would slow its economic stimulus program.

The U.S. economy expanded at an annual rate of 2.8 percent in the third quarter, up from 2.5 percent in the previous quarter. That made investors think the Fed could start cutting back its stimulus this year.

It "certainly raises the possibility of the Fed pulling back in December," said Peter Cardillo, chief market economist at Rockwell Global Capital. "The Fed is going to test the water."

The Fed is buying $85 billion of bonds a month to hold down interest rates and encourage hiring and borrowing. That has helped drive U.S. stock markets to record levels.

Twitter's stock started trading at $45.10, shortly before 11 a.m. Eastern Time. That was up 73 percent from its initial offering price of $26 a share.

The Dow Jones industrial average fell 68 points, or 0.4 percent, to 15,677 as of 11:17 a.m. Eastern Time.

The Standard & Poor's 500 index fell 12 points, 0.7 percent, to 1,757. The Nasdaq composite edged down 51 points, or 1.3 percent, to 3,880.

In government bond trading, the yield on the 10-year Treasury note fell to 2.61 percent from 2.64 percent a day earlier.

Oil fell 83 cents to $93.99 a barrel. The price of gold dropped $7.90 to $1,309 an ounce.

Among other stocks making big moves:

— J.C. Penney rose 35 cents, or 4.7 percent, to $8.06. The company said that a key sales barometer rose in October for the first time in nearly two years. The company's stock is still down 60 percent this year.

— Whole Foods Market plunged $6.02, or 9.4 percent, to $58.45 after the company cut its outlook for sales growth and earnings for its next fiscal year.

— Qualcomm fell $2.46, or 3.5 percent, to $67.28 after the chip maker's earnings fell short of Wall Street's forecast.