Dow closed at 10,465, unchanged.
NEW YORK (AP) — Stocks had a fitting end to a choppy July as
prices seesawed their way to a narrowly mixed finish. But despite
the turbulence, this was still the market’s best month in a
year.
Investors had an ambivalent response to the government’s gross
domestic product report, which showed that economic growth slowed
in the April-June quarter. The Dow Jones industrial average fell
almost 120 points in early trading, then ratcheted up and down
until the close. The Dow ended down just a point, and the other big
indexes had similarly small moves.
The day was much like the rest of July, which saw investors
alternately buying on strong earnings reports and selling on weak
economic numbers. The Dow rose 7.1 percent for the month, its best
showing since it rose 7.8 percent in July 2009.
But a repeat performance in August seemed unlikely amid investors’
pessimism at the end of the month, especially since the bulk of
companies’ second-quarter earnings reports are in.
“It’s a very cautious environment today,” said Rob Lutts,
president, CIO at Cabot Money Management. That caution, he said, is
what leads investors to sell.
The Commerce Department’s GDP report was troubling for the market.
GDP grew at an annual pace of 2.4 percent in the second quarter,
less than the 2.5 percent forecast of economists polled by Thomson
Reuters.
The report confirmed investors’ belief that the recovery is
weakening as unemployment remains high and government stimulus
programs end. Consumers cut back on their spending because of job
worries and companies spent less to rebuild inventories.
But analysts said that as investors read deeper into the report, it
didn’t look as bad as they initially thought. They found some good
news in consumers’ savings rate.
And business spending on equipment and software jumped in the
second quarter by the biggest amount in 13 years. That was
encouraging, analysts said, because it means companies are
eventually going to start adding jobs.
Overall, “we had a little bit for the bulls and a little bit for
the bears and ultimately no one is really happy,” Lutts said.
The Dow fell 1.22, or 0.01 percent, to 10,465.94. The Standard &
Poor’s 500 index rose 0.07, or 0.01 percent, to 1,101.60, while the
Nasdaq composite index rose 3.01, or 0.1 percent, to 2,254.70.
Rising stocks outpaced losers by about 3 to 2 on the New York Stock
Exchange where volume came to 1.1 billion shares.
Volume was extremely light even for a summer day. That continued a
trend seen for much of July. Analysts say many investors, uncertain
about the where the market is heading, stayed on the sidelines or
moved money into safer alternatives.
That strategy sent Treasurys higher Friday. The yield on the
10-year Treasury note, which moves opposite its prices, fell to
2.91 percent from 2.99 percent. Its yield is often used as a
benchmark for interest rates on mortgages and other consumer loans.
A yield below 3 percent suggests investors are worried about
long-term growth and don’t fear inflation will be a problem anytime
soon. Inflation is a threat to the long-term value of bonds.
