* Fourth-quarter GDP growth revised downward
* Indexes: Dow off 0.3 pct, S&P down 0.2 pct, Nasdaq off 0.5 pct (Updates to afternoon)
By Caroline Valetkevitch
NEW YORK, Feb 27 (Reuters) - U.S. stocks dipped Friday afternoon as data showed U.S. economic growth slowed more sharply than initially thought in the fourth quarter, though the Dow and S&P 500 were on track for their best monthly performance since October 2011.
A separate economic report showed a gauge of business activity in the U.S. Midwest dropped to its lowest reading since July 2009 in February.
"That maybe set a tone for the market that wasn't wildly ebullient," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
Apple, down 1.2 percent at $128.84, weighed on both the S&P 500 and Nasdaq. Among other decliners, J.C. Penney dropped 5.5 percent to $8.62 after the retailer posted a surprise quarterly loss and forecast small margin improvements this year.
At 2:41 p.m., the Dow Jones industrial average fell 51.68 points, or 0.28 percent, to 18,162.74, the S&P 500 lost 3.83 points, or 0.18 percent, to 2,106.91 and the Nasdaq Composite dropped 22.34 points, or 0.45 percent, to 4,965.55.
After a sluggish start to the year, stocks have rebounded sharply in February. The Nasdaq is on pace for its best month since January 2012 and remains within striking distance of the 5,000 level after a string of recent gains.
Shares of Monster Beverage jumped 13.4 percent to $140.67, the biggest percentage gainer in the S&P 500 and Nasdaq, while shares of Ross Stores gained 6.3 percent to $105.33, following the release of their results.
So far, Thomson Reuters data shows S&P 500 earnings increased 6.8 percent in the fourth quarter, above expectations at the start of this quarter.
Bank of America shares lost 1.3 percent to $15.83. The company said two members of its board of directors and its chief accounting officer will be leaving the company in coming weeks. UBS also cut its rating on the stock to "neutral," from "buy." (Additional reporting by Chuck Mikolajczek; Editing by Bernadette Baum and Nick Zieminski)