Higher GDP good for economy, hurts Wall Street

NEW YORK (AA) – Wall Street closed Thursday with losses as the likelihood of the Federal Reserve raising rates returned to investors’ agenda.

The country’s GDP grew 1.4 percent in the second quarter, revised from a preliminary estimate of 1.1 percent, the Commerce Department said Thursday.

The upward revision was seen as recovery in the economy by Kansas City Fed President Esther George, who said the time to remove some of the Fed's accommodation may have arrived.

"We're late in the year now. How many moves we can make is going to be a function of the calendar," George told CNBC, suggesting that incoming economic data such as the GDP would be watched even closer by the Fed for its interest rate decision.

George, who is a voting member of the Federal Market Open Committee (FOMC) this year, voted in favor of raising the bank's benchmark interest rate at the last four of five FOMC meetings.

The Fed's remaining meetings this year are in November and December.

With the possibility of a Fed rate hike back on the table, there was a sell-off in the stock market.

The Dow Jones was down 195 points to finish the day at 18,143 and the S&P lost 20 points to close at 2,151. The Nasdaq lost 49 points to end the day at 5,269.