Updated at 4:03 p.m. ET: Stocks closed Friday essentially flat after data showed the economy grew at a faster pace than expected, overshadowing recent concerns about a disappointing earnings season so far.
The Commerce Department said U.S. gross domestic product expanded at a 2.0 percent annual rate. That follows 1.3 percent growth in the second quarter, and was just a tick above the 1.9 percent estimate of analysts polled by Reuters.
"The fact that this was a two percent GDP number is still pathetic in the overall scheme of life - we ought to be growing at four percent, not two percent," said Phil Orlando, chief equity market strategist, at Federated Investors, in New York.
Apple Inc, the world's largest company by market capitalization, reported a second straight quarter of disappointing results and iPad sales fell well short of analysts' targets. The company also forecast revenue and margins below Wall Street forecasts.
Amazon.com Inc after posting its first quarterly net loss in more than five years. It forecast fourth-quarter revenue that fell short of analysts' expectations.
The S&P 500 has dropped some 1 percent this week as dismal corporate earnings and cautious outlooks, especially from large multinationals, painted a pessimistic picture of the global economy.
Adding to uncertainty was the impending U.S. presidential election on November 6, which, along with earnings and growth worries, helped drop the benchmark S&P index to below a key support level, the 50-day moving average, at around 1,434.
Many analysts expect the retreat to wane near 1,400 or 1,375, as the Federal Reserve's latest stimulus policy puts a floor under equity prices.
With 244 companies in the S&P 500 having reported, 62.3 percent have beaten earnings expectations, a tad better than the typical 62 percent average, Thomson Reuters data showed.
Revenue for the quarter has been more disappointing, with just 36.3 percent of companies reporting higher-than-expected revenue - compared with a historic beat rate of 62 percent.
Goodyear Tire & Rubber Co slumped after it said quarterly profit fell amid lower tire sales in all its key markets, and particularly in Europe.
Dow component Merck & Co Inc slipped after the drugmaker reported better-than-expected third-quarter profit, though overall sales came in slightly below Wall Street expectations.
Newell Rubbermaid Inc reported a higher-than-expected quarterly profit and raised its quarterly dividend by 50 percent to 15 cents a share but also said it would cut about 2,000 jobs over the next 2 1/2 years as it attempts to combat slower sales.
Arch Coal Inc surged after surprising Wall Street with a third-quarter profit as cost cuts paid off, and the company said thermal coal shipments were improving.
Reuters contributed to this report.
