New York, January 29th (TradersHuddle.com) - Stocks erased early gains and posted their worst monthly decline in nearly a year as concern over the outlook for the technology sector earnings overshadowed encouraging economic data that showed the U.S. economy grew at the fastest pace in six years.

The Dow Jones Industrial Average fell 53.13 points, or 0.52%. The S&P 500 index slid 10.66 points or 0.98%, while the NASDAQ tumbled 31.65 points or 1.45%. Market breadth was negative. On the NYSE, decliners topped winners by a rate of 11 to 5. On the NASDAQ, losers outpaced advancers by a rate of 7 to 4.

For the week, the Dow lost 1.04%, while the S&P 500 index fell 1.64% and the NASDAQ slid 2.63%.

The market started strongly to the upside as investors received a trio of encouraging economic reports on the U.S. economy. The government reported that the fourth quarter GDP rose at a better than expected 5.7% pace, as manufacturers increased production to avoid plunging inventories. Later in the morning the Chicago PMI jumped to 61.5 in January, while consumer confidence hit a 2-year high in January.

The momentum from the good economic data was met with selling pressure, particularly in the technology sector as concerns that stock valuations in the sector have moved ahead of the economic facts in the ground continued. Earning outlook jitters helped technology to post the worst decline among the 10 key S&P 500 sectors. Materials and energy were also lower following technology’s lead dragging the overall market lower.

The sell-off was broad based, but big cap tech like Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Intel (NASDAQ:INTC) were among the big decliners.

18 of the 30 Dow components posted declines, with Microsoft (NASDAQ:MSFT) as the worst Dow component, after shares of the largest software publisher in the world fell 3.36% to $28.18. Microsoft shares skidded despite its profit jumping 60% and beating analyst expectations on the strength of the Windows 7 introduction. Strong results were anticipated and already priced in the stock, as previous reports indicated strong pc demand, as consumers drove up sales of cheaper computers during the holiday shopping season.

The second biggest decline in the blue chip index was Boeing (NYSE:BA), after shares of the aircraft maker lost 3.13% to $60.60. The drop in Boeing’s order backlog pushed investors to sell the stock as earnings outlooks took center stage during the trading day.

The third worst Dow component was Intel (NASDAQ:INTC), as shares of the largest chipmaker in the world fell 2.61% to $19.40, extending yesterday’s losses. The Stock was under pressure on investors’ concerns about earnings and sales forecasts in the sector.

Shares of Chevron (NYSE:CVX) fell 1.53% to $72.12, posting the fourth biggest decline in the blue chip index. The second largest energy producer in the U.S. reported profit that fell short of estimated by dropping 37% as margins in the refining business were squeezed by higher crude oil prices. The company earned $1.53 a share versus analysts’ expectations of $1.70 a share.

The fifth worst Dow stock was Hewlett-Packard (NYSE:HPQ) as shares of the largest maker personal computers and printers fell 1.51% to $47.07, as technology stocks weakness mounted across the board.