The GDP grew at a 3.9 percent annual rate in the first quarter — a strong pace, but less than Wall Street expected. Investors put a mixed spin on the news — some believed the lower figure would mean less inflation and moderate interest rates, while others questioned the strength of the economic recovery.

However, most investors agreed that the GDP figure would prevent the Federal Reserve from raising rates aggressively at its meeting next week. Wall Street is expecting a 0.25 percent rate hike from the two-day meeting that starts Tuesday.

"I think at this point, a half-point raise is off the table," said Daniel Portanova, managing director at Gartmore Separate Accounts in Irvington, N.Y. "And I think the market will be comfortable with a quarter-point rate hike, especially after seeing this number."

The market suffered some volatility in the last hour of trading as institutional investors adjusted their portfolios to reflect the annual rebalancing of the Russell indexes.

According to preliminary calculations, the Dow Jones industrial average fell 71.97, or 0.7 percent, to 10,371.84.

Broader stock indicators were mixed. The Standard & Poor's 500 index was down 6.33, or 0.6 percent, at 1,134.32, and the Nasdaq composite index gained up 9.90, or 0.5 percent, at 2,025.47. The Nasdaq is home to many small cap stocks, which are measured by the Russell 2000 index.

The Russell 2000 was up 8.62, or 1.5 percent, at 587.67.

For the week, the Dow lost 0.4 percent and the S&P 500 dropped 0.1 percent, while the Nasdaq gained 2 percent. The Dow reversed a four-week run of gains and the S&P 500 had its second consecutive losing week. The Nasdaq reversed last week's decline.

The Commerce Department's GDP figure, which measures the value of all goods and services produced in the nation, was less than the 4.4 percent economists expected. The lower figure was blamed on a spiraling trade deficit as well as a moderation in consumer spending.

Spending on previously owned homes was not moderate, however.

The National Association of Realtors reported sales of existing homes climbed to a record annual rate of 6.8 million homes in May, up 2.6 percent from April.

Despite the new data, however, volume remained low as investors looked to the Fed meeting and the handover of power in Iraq next week before making any large moves on the markets.