NEW YORK – 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.
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