NEW YORK (CNNfn) - U.S. stocks fell for a third straight session Wednesday, and the Dow Jones industrial average hit a four-and-a-half-month low, after fresh economic data once again delayed hopes for a turnaround in profits.
The nation's gross domestic product barely budged last spring and posted its weakest performance in more than eight years, the government said, as businesses pulled back on spending.
"The business sector is worse than previously believed," said Mike Moran, senior economist at Daiwa Securities. "And exports were softer than indicated by initial estimates."
Second-quarter GDP rose by 0.2 percent, less than the 0.7 percent gain initially reported last month. While the figures heartened the economists who forecast a decline, it was still the economy's weakest quarterly performance since 1993.
Another round of corporate profit worries didn't help. Chipmaker Advanced Micro Devices said sales will fall short of estimates, one day after computer maker Gateway announced big job cuts.
"The market continues to suffer from lots of negative news," said Alan Ackerman, market strategist at Fahnestock & Co.
Comverse Technology, which makes telecommunications software, said its profit in the latest quarter tumbled. Sun Microsystems, Juniper Networks and Gap all saw their profit forecasts cut by analysts.
The Dow industrials fell 131.13, or 1.3 percent, to 10,090.90, for its lowest close since April 14, when the blue chips ended at 10,013.47.
The Nasdaq composite index lost 21.81 points, or 1.2 percent, to 1,843.17 while the Standard & Poor's 500 index declined 12.95 to 1,148.56.
More stocks fell than rose. On the New York Stock Exchange, declining issues topped advancing ones 1,706 to 1,416 as 953 million shares changed hands. Nasdaq losers beat winners 2,068 to 1,527 as 1.4 billion shares traded.
In other markets, Treasury securities edged higher. The dollar declined against the yen and euro.
Warnings, downgrades
Corporations still are having trouble with slowing demand as the economy slows. Advances Microsystems (AMD: down $0.66 to $14.20, Research, Estimates) warned that sales in the current quarter likely will fall short.
Gateway (GTW: up $0.19 to $8.79, Research, Estimates) said it will cut 25 percent of its work force in an effort to become profitable by the fourth quarter.
Merrill Lynch lowered it earnings targets for Juniper Networks (JNPR: down $1.16 to $15.54, Research, Estimates), saying business for the maker of communications gear "continues to be tough."
Comverse Technology (CMVT: down $2.50 to $26.05, Research, Estimates), which makes telecommunications systems and software, said second-quarter earnings before one-time charges fell 20 percent.
Merrill Lynch cut its profit outlook for Sun Microsystems (SUNW: down $0.13 to $13.43, Research, Estimates) one day after Goldman Sachs made a similar move. The server maker is updating analysts on the current quarter after the close of trading.
Banc of America Securities lowered its profit forecast for Gap (GPS: down $0.60 to $19.70, Research, Estimates) two weeks after the retailer warned that third-quarter earnings will fall short.
Only two stocks among the 30 Dow industrials rose: McDonald's (MCD: up $0.11 to $30.00, Research, Estimates) SBC Communications (SBC: up $0.08 to $41.45, Research, Estimates).
And Global Crossing (GX: up $0.22 to $4.19, Research, Estimates), the telecommunications company, said it was comfortable meeting sales forecasts for the current quarter.
Stock indexes initially gained following the GDP report, which showed that the economy at least didn't contract.
And the figures held some positives. Business reduced inventories fell while retail spending was revised higher.
Still, only a year ago the economy was growing at a clip above 5 percent. Worried about the slowdown, the Federal Reserve this year cut interest rates seven times. But only retail sales and the housing market have shown signs of stability.
"We have yet to see any tangible signs of economic recovery and you start to worry whether consumers will be able to hang on until business activity picks up," said John Forelli, portfolio manager at Independence Investment.
Economic data have taken on more importance in recent days. Weak figures on consumer confidence and home sales sent stocks lower Monday and Tuesday. The days ahead bring figures on jobless claims, factory orders, personal income and consumer sentiment.
On Friday, stocks surged and the Nasdaq soared 4 percent. But three days of losses has wiped out all those gains. 
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