NEW YORK — A downward revision of U.S. economic growth in the third quarter sent stocks lower Tuesday. Higher borrowing costs for Spain also renewed worries about Europe’s debt crisis.
The Commerce Department reported that the U.S. economy grew at a 2 percent annual rate from July through September, down from its initial estimate of 2.5 percent. Economists had expected the figure to remain the same.
The Dow Jones industrial average lost 53.59 points, or 0.5 percent, to close at 11,493.72.
Aluminum maker Alcoa led the Dow lower. The Dow had been down as many as 113 points shortly before noon.
The Dow plunged 249 points Monday as a congressional committee failed to reach a deal to cut budget deficits and amid increased concerns over European debt.
The deadlock raised fears that rating agencies might lower the U.S. government’s credit rating if Congress tries to circumvent the automatic spending cuts that are supposed to occur in the event of an impasse. Some Republicans have said they would try to block cuts to defense spending.
“Markets are looking for clarity, and you didn’t get that from the supercommittee,” said Steven Ricchiuto, chief economist at Mizuho Securities. “There’s no reason to believe the economy is going to get stronger.”
Across the Atlantic, there were more signs of trouble in Europe’s debt crisis. Spain was forced to pay sharply higher interest rates in an auction of short-term debt. The higher rates suggest that investors are still skeptical that the country will get its budget under control despite a new, center-right government coming to power this week.
Investors have been worried that Spain could become the next country to need financial support from its European neighbors if its borrowing rates climb to unsustainable levels.
Greece was forced to seek relief from its lenders after its long-term borrowing rates rose above 7 percent on the bond market. The rate on Spain’s benchmark 10-year bond is dangerously close to that level, at 6.58 percent.
The Standard & Poor’s 500 fell 4.94 points, or 0.4 percent, to 1,188.04. The Nasdaq composite fell 1.86, or 0.1 percent, to 2,521.28.
It was the fifth straight decline for the S&P 500, the longest losing streak since August. The S&P has lost 5.5 percent over the past week on worries that Spain could get dragged into Europe’s debt crisis and as Congress neared a deadlock over cutting the U.S. budget deficit.
In other trading, Netflix sank 5.4 percent to $70.45, the lowest level since March 2010. 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.
