Stocks mixed as government lowers growth estimate

NEW YORK (AP) ? Stock indexes were mixed Tuesday morning after the government lowered its estimate of economic growth in the second quarter. Hewlett-Packard Co. sank 3 percent, dragging down the Dow Jones industrial average.

H-P lowered its earnings forecast for the 2012 fiscal year after the market closed Monday. The tech giant said it was being “cautious,” pointing to Europe’s debt crisis and weak consumer spending.

The Commerce Department said the U.S. economy grew at a 2 percent annual rate in the July-September period, down from its initial estimate of 2.5 percent. That was a disappointment for investors since economists expected the figure to remain unchanged.

The Dow Jones industrial average was down 4 points to 11,544 as of 9:50 a.m. The Standard & Poor’s 500 index rose 2 points, or 0.2 percent, to 1,195. The Nasdaq composite rose 7, or 0.3 percent, to 2,530.

The Dow plunged 249 points Monday as a congressional committee failed to reach a deal to cut budget deficits. The congressional impasse raised fears that rating agencies might lower the U.S. government’s credit rating.

After the market closed Monday, the major agencies said the country’s credit rating was unaffected by the news, but Standard & Poor’s also said its current rating is based on the expectation that automatic cuts will start in 2013. Some Republicans have said they would block the defense spending cuts.

In other trading, Netflix Inc. sank 2.7 percent. The online video rental company said it raised $400 million from selling debt and stock as it tries to recover from a consumer backlash following price hikes.

Medtronic Inc. rose 3.5 percent. The world’s largest medical device maker reported higher-than-expected earnings and reaffirmed its full-year outlook.