US stocks mixed

Wall Street stumbled through a choppy session today and ended mixed, with blue chips giving up a modest gain and tech stocks holding on to their own moderate advance.

Investors were ambivalent as they analysed two economic reports. A Labour Department report of a jump in unemployment insurance claims fed early selling, but investors took some heart from a Commerce Department report on the gross domestic product.

“Those two forces are really counteracting each other,” said Robert Froehlich, chief investment strategist for Deutsche Asset Management in Chicago.

The Dow Jones industrial average closed down 23.10, or 0.3%, at 8,670.99. That came after a 1.5% decline on Wednesday.

The broader market was mixed. The Nasdaq composite index rose 21.38, or 1.6%, to 1,335.76, having fallen 2.5%. The Standard & Poor’s 500 index dipped 0.07, or 0.01%, to 917.80, following a drop of 1.8%.

The Commerce Department said the US economy as measured by the gross domestic product grew in the second quarter at an annual rate of 1.1%, slower than the 5% pace in the first quarter. The reading was unchanged from its initial estimate a month ago.

But new claims for unemployment insurance rose by 8,000 last week to a seasonally adjusted 403,000, the highest level since July 6, according to the Labour Department. Economists had expected claims to decline.

Analysts said investors, despite initial concerns about the GDP figure, later seemed to be somewhat encouraged that it was not revised downward. That would have raised fears of a possible double-dip recession.

Tech shares, meanwhile, were boosted by a bout of bargain-hunting.

Losers included companies with downgraded shares or disappointing earnings outlooks. General Electric fell 95 cents to dlrs 30.35 after Lehman Brothers cut its 2003 earnings estimates on the company.

Kroger dropped dlrs 1.16 to dlrs 18.34 after JP Morgan downgraded it to “market perform” from “buy”. Shoe retailer Footstar dropped dlrs 2.10 to dlrs 11.45 after cutting its third-quarter outlook.

Helping boost tech stocks was Yahoo!, which rose dlrs 1.12 to dlrs 10.25, after Merrill Lynch boosted its rating to “neutral” from “sell”.

Advancing issues led decliners 4 to 3 on the New York Stock Exchange. Volume was very light in advance of Labour Day.

The Russell 2000 index, which tracks smaller company stocks, rose 5.02, or 1.3%, to 394.40.