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The Dow Now: Bank of America and JPMorgan Led Decline of Financials

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Microsoft and Intel were up on the day.

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MINYANVILLE ORIGINAL After rising in early morning trading, US stocks edged down by midday on a set of mixed economic data.

The final October reading of the University of Michigan/Thomson Reuters consumer sentiment indicator was revised downwards to 82.6 from 83.1, when the consensus was a reading of 83.0. The final reading is still the highest recorded since September 2007.

Meanwhile, the first reading of US third-quarter GDP growth came in at 2%, according to the government. Wall Street had projected the economy would grow 1.7%.

The government reported the US economy picked up speed in the third quarter, growing at a 2% annualized clip versus a 1.3% pace in the second quarter. Analysts had expected the initial reading on growth in gross domestic product for the third quarter to come in at 1.7%. (See: US economy speeds up in third quarter.)

"The good news is the consumer was more active in the third quarter than the consumer was in the second quarter. We expected good news and this is better news; the only caveat is part of the increase is government spending, and that is going away," Art Hogan, market strategist at Lazard Capital Markets, told MarketWatch.

The Dow Jones Industrial Average (INDEXDJX:.DJI) was down 0.38% to 13,054.38 points as of 12:08 p.m. EDT.

Microsoft (NASDAQ:MSFT) was one of the bright spots in intraday trading, inching up 0.36% to $27.98 on investor optimism over the release of its new Surface tablet and new Windows 8 operating system.

Intel (NASDAQ:INTC), whose shares have taken a beating in recent weeks, also gained 0.70% to $21.84. Yesterday, the census bureau's durable goods report for September revealed that the computer and electronic products sector dipped 2.5%, which was not as bad as investors had expected.

Dow financials endured the worst hammering in a bearish day for banks stocks, with Bank of America (NYSE:BAC) falling 1.84% to $9.07 and JPMorgan (NYSE:JPM) sliding 1.54% to $41.03. The bellwether Financial Select Sector SPDR ETF (NYSEARCA:XLF), which tracks all financial stocks in the S&P 500, was down 1.01% to $15.72 .

Bank of America was among nine banks, including Credit Suisse (NYSE:CS), Royal Bank of Canada (NYSE:RY), and Société Générale (PINK:SCGLY), among others, subpoenaed by US state prosecutors in an investigation of the LIBOR scandal, notes the Wall Street Journal.

Twitter: @sterlingwong
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