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Stocks drop on news economy contracted slightly

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A signal that the economy is far from healed put the brakes on January’s rally, which has pushed stocks near record highs. The S&P 500 logged its biggest fall of the year on news GDP shrank a bit in the fourth quarter for the first time since the recession ended — hurt by the biggest cut in defense spending in 40 years, fewer exports, and sluggish growth in company stockpiles. Stocks continued to decline after the Fed said it will extend its bond-buying program to help boost growth. Growth has ‘paused in recent months,’ the central bank said. Still, stocks are on track for a strong month; the Dow is up 6.2% since the year began, close to its highest ever.

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