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Stocks edge higher in very light trading

By MICHAEL J. MARTINEZ
The Associated Press

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NEW YORK — Investors sent stocks modestly higher yesterday, 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 Dow Jones industrial average was up 21.60 for the day to close at 10,195.01.

Microsoft, one of the 30 Dow stocks, was up 2 cents to $27.46, up 1.3 percent for the week. Boeing, also a Dow stock, slipped 8 cents to $51.99, and ended the week up 3 percent.

Broader stock indicators were modestly higher. The Standard & Poor's 500 index was up 2.68 to 1,107.77, and the Nasdaq composite index gained 9.17 to 1,862.09.

For the week, the Dow gained 0.8 percent, the S&P was up 0.9 percent and the Nasdaq rose 1.3 percent.

The 2.8 percent GDP growth in the second quarter, a revision from the 3 percent preliminary figure reported in July, is a far cry from the 4.5 percent growth in the first quarter.

However, the figure was slightly better than the 2.7 percent expansion economists had forecast. That gave investors hope that this week's drop in oil prices could spark stronger economic growth for the current quarter.

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 with the first quarter. Profits were still up 17.9 percent year-over-year.

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."