Stocks cut losses as Boeing provides smiles

NEW YORK -- Stocks pared losses and the Dow Jones industrial average turned positive in afternoon trading Thursday as plane maker Boeing rose after it said it expects the first flight of its long-delayed 787 Dreamliner by the end of 2009 and as oil prices cut losses.

Investors ignored reports on unemployment and gross domestic product that showed the nation's economy appears to be stabilizing.

The Labor Department said first-time unemployment claims fell 10,000 to a seasonally adjusted 570,000. Though jobless claims declined, it was just shy of economists expectations for 565,000.

A Commerce Department report showed the nation's economy shrank at a 1% annualized rate in the second quarter. The updated figure was unchanged from a preliminary reading on the nation's GDP, which measures the value of all goods and services produced within the U.S.

Economists had been predicting the figure would be revised lower to a 1.5% decline.

Overseas, Asian stocks fell after China said it would cut excessive investment in some industries, while European stocks were mixed.

On Wednesday, the Dow rose just 4 points, while the S&P and Nasdaq eked out gains of less than 1 point despite further signs the economy might be on the mend — a sign the market rally might be losing steam. The Commerce Department reported that new-home sales rose 9.6% in July for the fourth straight monthly increase. The department also said factory orders for goods expected to last at least three years rose 4.9% in July, the biggest jump in two years and easily eclipsing economists' expectations.