* GDP shy of expectations, consumer confidence dips
* Amazon.com weighs on S&P after results; Chevron helps Dow
* Major averages on track to post solid gains for the week
* Indexes: Dow flat, S&P down 0.4 pct, Nasdaq down 0.6 pct
By Ryan Vlastelica
NEW YORK, April 26 (Reuters) - U.S. stocks fell on Friday as the broadest measure of U.S. economic growth fell short of expectations in the first quarter and Amazon.com gave a disappointing outlook.
Amazon.com Inc tumbled after the world’s largest Internet retailer reported its results late on Thursday and was the biggest drag on the S&P 500 and Nasdaq indexes.
Gains by shares of Hewlett-Packard Co and Chevron Corp limited losses in the Dow. Despite Friday’s decline, major indexes were on track for a week of solid gains.
Gross domestic product expanded at a 2.5 percent rate in the first quarter, the Commerce Department said, which was below estimates of 3 percent but stronger than the fourth quarter’s 0.4 percent rate in 2012.
Even before the data, economists have raised doubts about the ability of the economy to absorb government spending cuts and higher taxes. Investors likely speculated the Federal Reserve, which meets next week, will debate whether to take more measures to boost growth or at least keep the current stimulus plans in place.
“The moderate move to the downside isn’t out of line with the GDP data as light as it was,” said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group in Greenwich, Connecticut. “It wasn’t so great, but not bad enough to derail the freight train the market has been on.”
The S&P is 1.5 percent higher for the week while the Dow is up 1 percent and the Nasdaq up 2 percent.
The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment fell to 76.4 from 78.6 in March, although it topped economists’ expectations.
Amazon shed 7.4 percent to $254.51 after it said revenue growth slowed in the first quarter as the company struggled overseas, but margins jumped on lower shipping expenses.
Chevron rose 0.8 percent to $119.48 after the second largest U.S. oil company posted earnings that beat expectations, helped by foreign currency gains.
“In general, earnings haven’t been blockbusters, but the fact that we’ve had a sharp rally through the season tells you the market is relatively sanguine about what has come out,” Sosnick said.
The Dow Jones industrial average was down 6.44 points, or 0.04 percent, at 14,694.36. The Standard & Poor’s 500 Index was down 6.84 points, or 0.43 percent, at 1,578.32. The Nasdaq Composite Index was down 19.94 points, or 0.61 percent, at 3,270.05.
Hewlett-Packard gained 3.3 percent to $20.24, helping to limit losses by the Dow.
J.C. Penney Co was the S&P 500’s biggest gainer, jumping 8.7 percent to $16.56 a day after investor George Soros reported a 7.9 percent passive stake in the company.
Shares of Starbucks Corp, the world’s biggest coffee chain, slipped 1 percent to $59.85 after it reported revenue was slightly below expectations.
The PHLX housing sector index gained 1.2 percent and was on track for its sixth consecutive advance, getting a lift from D.R. Horton Inc after the No. 1 U.S. homebuilder reported earnings.
D.R. Horton shares jumped 7.3 percent to $26.31.
With 51 percent of the S&P having reported, 69 percent have beaten earnings expectations, above the 63 percent average since 1994 and slightly over the 67 percent beat rate over the past four quarters.
However, revenue has been lackluster, with only 42 percent topping analyst forecasts, well below the 62 percent average since 2002 and the 52 percent beat rate for the last four quarters.
Analysts now see earnings growth of 3.6 percent this quarter, up from expectations of 1.5 percent at the start of the month.