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Stocks drop as economy put brakes on stock rally

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By The Associated Press
Wednesday, Jan. 30, 2013, 5:10 p.m.

NEW YORK — A reminder that the economy still remains a long way from being fully healed after the Great Recession put the brakes on a January rally that has pushed stocks close to record levels. The Standard & Poor's 500 logged its biggest drop of the year.

Stocks started the day lower after a report showed that the U.S. economy unexpectedly contracted in the fourth quarter. That decline extended after the Federal Reserve said it would continue its bond-buying program to boost growth.

The Dow Jones industrial average fell 44 points, or 0.3 percent, to close at 13,910.42, logging only its second decline in nine days. The Standard & Poor's 500 fell 6 points, or 0.4 percent, to 1,501.96, its biggest decline since Dec. 28. The Nasdaq composite fell 11 points to 3,142.31.

Stocks remain on track for a great January.

The Dow Jones average has surged 6.2 percent since the start of the year, climbing close to 14,000 and within touching distance of its record level. The S&P 500 has gained 5.3 percent this month, close to its highest level in more than five years.

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