The latest GDP reading, which benefited from consumers cashing tax rebate checks, still shows the economy grew at a faster pace than the weak 0.9 percent seen in the first quarter. But revised numbers also reveal that the economy shrank in the fourth quarter last year.
Stocks futures, which had been higher ahead of the reading, also lost ground after the Labor Department reported that the number of people seeking jobless benefits jumped to 448,000, an increase of 44,000 from the previous week. Economists had been expecting a decline of 8,000.
The readings follow sharp gains for stocks in the past two sessions as investors bet on a rebound in the beaten-down financial sector and grew more optimistic about the Labor Department's important July employment report on Friday.
But even as stocks have rallied at times in recent weeks investors have remained concerned about the housing and credit markets, the health of financial companies and the effect of high commodities prices. A pullback in oil in the past few weeks has raised some hopes that inflation could remain in check. Stocks managed to rally Wednesday in the face of rising oil prices, a rare occurrence.
Dow Jones industrial average futures fell 92, or 0.79 percent, to 11,488. The Dow jumped more than 180 points Wednesday, bringing its two-day gain to more than 450.
Standard & Poor's 500 index futures fell 7.70, or 0.60 percent, to 1,277.20, and Nasdaq 100 index futures declined 12.00, or 0.65 percent, to 1,844.25.
Bond prices jumped following the economic readings. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.97 percent from 4.05 percent late Wednesday. The dollar was mixed against other major currencies, while gold prices rose.
Light, sweet crude fell 25 cents to $126.52 in premarket electronic trading on the New York Mercantile Exchange after rising more than $4.50 on Wednesday.
Investors are also sifting through a flurry of quarterly profit reports. Exxon Mobil Corp. reported second-quarter earnings of $11.68 billion, the largest quarterly profit ever by a U.S. corporation. However, the company's per-share results fell well short of Wall Street's forecast. Analysts had been expecting that record crude prices would push earnings higher.
Motorola Inc. posted a surprise profit for its second quarter. The company said it shipped more cell phones than in the first quarter.
Eastman Kodak Co. reported a second-quarter profit but the results missed Wall Street's forecast.
Starbucks Corp. after the closing bell Wednesday posted its first quarterly loss as a public company and lowered its forecast for the year. The coffee chain also said it would open fewer locations.
CVS Caremark, the drug store and pharmacy operator, said its second-quarter earnings rose 7 percent following stronger sales at its retail drug stores.
Diversified manufacturer Tyco International Ltd. said it swung to a fiscal third-quarter profit from a loss a year earlier when the company booked charges.
Overseas, Japan's Nikkei stock average closed up 0.07 percent. In afternoon trading, Britain's FTSE 100 rose 0.35 percent, Germany's DAX index slipped 0.04 percent, and France's CAC-40 fell 0.38 percent.
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