Investors sent stocks modestly higher Friday, embracing a sluggish gross domestic product reading that was nonetheless better than expected and hoping that falling oil prices would help spur the economy. The major indexes all finished the week higher.
The second-quarter's 2.8% growth in the GDP, revised from a 3% preliminary figure reported in July, is a far cry from the first quarter's 4.5% growth. However, the figure was slightly better than the 2.7% economists had forecast for the revision. That gave investors hope that this week's drop in oil prices could spark stronger economic growth for the current quarter.
Still, with the Republican National Convention next week and traditionally slow trading in August, volume on the major markets remained extremely low -- it was the lightest trading day of the year on the New York Stock Exchange -- and any boost in stocks would be seen as tentative at best, analysts said.
"This is really anemic," said Chris Johnson, director of quantitative analysis at Schaeffer's Investment Research in Cincinnati. "That's letting a bit of volatility come into the market, but so far this week, it's been on the upside. So when everyone comes back in September, at least we'll be working in a slightly higher market."
The Dow Jones industrial average was up 21.60 points, or 0.2%, at 10,195.01.
Broader stock indicators were modestly higher. The Standard & Poor's 500 index was up 2.68 points, or 0.2%, at 1,107.77, and the Nasdaq composite index gained 9.17, or 0.5%, to 1,862.09.
Advancing issues outnumbered decliners by nearly 2 to 1 on the NYSE.
For the week, the Dow gained 0.8%, the S&P was up 0.9% and the Nasdaq rose 1.3%. It was the second straight week of gains for the Nasdaq and the third straight week higher for the Dow and S&P.
Oil's slide for the week helped the market's mood. On Friday, crude settled at $43.18 a barrel, up 8 cents from Thursday, but for the week prices were down sharply after topping a record $49 a barrel the previous week.
Falling energy costs have also given corporate America reason to hope after a weaker second quarter. The Commerce Department reported that after-tax corporate profits fell $11.3 billion in the second quarter, as compared to the first quarter. Profits were still up 17.9% from the second quarter of 2003.
"It's such a mix of news today, and that really doesn't help us out," said Scott Wren, equity strategist for A.G. Edwards & Sons. "There's no clarity in terms of inflation, with the oil prices and GDP, and there's really not much clarity in terms of earnings growth."
In other markets highlights:
* U.S. Treasury yields were a sliver higher, but trading was thin. The yield on the benchmark 10-year note rose to 4.23%, from 4.21% Thursday.
* Coach and Urban Outfitters gained as investors using the S&P 500 and S&P MidCap 400 indexes as their benchmarks bought the shares. Coach, the largest U.S. seller of luxury- leather goods, will replace Charter One Financial in the S&P 500. Coach shares climbed $1.09 to $42.07. Clothing and accessories retailer Urban Outfitters, which will replace Coach in the S&P 400, rose 84 cents to $30.90.
* Airline stocks fell as American Airlines, the world's largest carrier, said its 2004 cost for jet fuel would be $1 billion higher than last year because of increased prices. AMR, American's parent, lost 33 cents to $9.01. Southwest Airlines fell 60 cents to $14.70.
* TiVo dropped 37 cents to $4.43. The maker of digital video-recorders that can pause and replay live television said it expected revenue this quarter of $27.2 million to $28 million. The company was expected to have revenue of $29.5 million.
* Among Southland issues, Hanmi Financial, parent of Hanmi Bank, surged $2.09 to $31.63, a record high.
* A Bloomberg News index of 156 real estate investment trust shares rose 0.5%. After plunging in April and May the index has climbed back to within 1.8% of its record high reached on April 1.