Now at 9,185, up 30 points.
NEW YORK (AP) — Traders aren’t making big moves on the final day
of a huge month for the stock market.
Investors reacted coolly to a report that the nation’s economy
shrank at a slower pace than expected in the April-June quarter.
Most stocks rose but major indexes seesawed in a tight range.
The nation’s gross domestic product, a measure of the economy’s
total output, slowed at a rate of 1 percent during the quarter.
That was better than the 1.5 percent drop expected by analysts. But
the report also found that consumers cut spending in the second
quarter, a troubling sign because their outlays account for more
than two-thirds of all U.S. economic activity.
Investors have been placing big bets this month that the longest
recession since World War II is finally beginning to recede. The
Dow began Friday with a gain of 8.4 percent for the month, its
strongest July since 1989, when it gained 9 percent. The blue chips
are on track to post the best performance of any month since
October 2002.
Alan Lancz, money manager at Alan B. Lancz & Associates, said the
GDP report signaled the economy was improving, but he worries that
investors are getting ahead of themselves and buying stocks as if
the economy will rebound quickly off the bottom.
“The good news is it’s heading in the right direction and the bad
news is the higher the market moves the more it’s discounting a
V-shaped recovery,” he said.
In early afternoon trading, the Dow rose 11.86, or 0.1 percent, to
9,166.32. The Standard & Poor’s 500 index rose 0.65, or 0.1
percent, to 987.40, while the Nasdaq composite rose 2.56, or 0.1
percent, to 1,986.86.
The GDP report is the strongest sign yet that the recession is
winding down. However, the Commerce Department revised the
first-quarter GDP figure much lower, saying economic activity
tumbled 6.4 percent. That is the worst quarterly reading in nearly
30 years.
The latest report also said consumers cut spending by 1.2 percent
in the second quarter, after a 0.6 percent increase in the first
quarter.
Investors have been looking to consumers to help lead the economy
out of a recession. Spending has been cut as consumers continue to
worry about jobs. The unemployment rate is expected to move higher
after hitting a 26-year high of 9.5 percent in June.
“We’re still not in very good shape in the employment part,” said
Steven Stahler, president of the Stahler Group in Baton Rouge, La.,
adding he doesn’t expect to see consumers leading the country of
out recession soon.
In corporate news, Walt Disney Co. fell 98 cents, or 3.7 percent,
to $25.24 after reporting a 26 percent drop in fiscal third-quarter
profits on slower DVD sales while revenue fell by 7 percent.
In other trading, bond prices rose. The yield on the benchmark
10-year Treasury note, which moves opposite its price, fell to 3.52
percent from 3.61 percent late Thursday.
Light, sweet crude rose $1.11 to $68.05 a barrel on the New York
Mercantile Exchange.
The dollar fell, and gold prices rose.
About two stocks rose for every one that fell on the New York Stock
Exchange, where volume came to 506.4 million shares compared with
680.7 million shares traded at the same point Thursday.
The Russell 2000 index of smaller companies rose 1.45, or 0.3
percent, to 559.25.
Overseas, Japan’s Nikkei stock average rose 1.9 percent. In
afternoon trading, Britain’s FTSE 100 fell 0.3 percent, Germany’s
DAX index declined 0.6 percent, and France’s CAC-40 declined 0.5
percent.
