Stocks finshed mixed, to end a winning month

NEW YORK -- Traders didn't make any 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.

At the close, preliminary figures showed the Dow Jones industrial average up 17.15 points or 0.19% to 9171.61; the S&P 500 stock index also gained a scant 0.73 points or 0.07% to 987.48; the Nasdaq, which had a booming month, shed 5.80 points or 0.29%, finishing at 1978.50.

The nation's gross domestic product, a measure of the economy's total output, slowed at a rate of 1% during the quarter. That was better than the 1.5% 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% for the month, its strongest July since 1989, when it gained 9%. 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.

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%. That is the worst quarterly reading in nearly 30 years.