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UPDATE 2-U.S. business spending data gives mixed signals on growth

* Durable goods orders rise 0.7 percent in June

* Orders excluding transportation increase 0.8 percent

* Core capital goods orders up 1.4 percent, shipments fall

(Recasts, adds details, new analyst comments)

WASHINGTON, July 25 (Reuters) - A mixed reading on the health of U.S. business investment on Friday suggested the economy may not have rebounded as strongly in the second quarter as previously believed, but it offered hope for the rest of 2014.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending plans, rebounded 1.4 percent after declining 1.2 percent the prior month, the Commerce Department said.

However, shipments of these so-called core capital goods fell 1.0 percent. Core capital goods shipments are used to calculate equipment spending in the government's gross domestic product measurement.

It was the third month of decline in shipments, prompting some economists to temper their second-quarter growth estimates.

"The weak performance in core capital goods shipments during the quarter suggests that this segment of the economy is unlikely to contribute much to economic activity," said Millan Mulraine, deputy chief economist at TD Securities in New York.

Morgan Stanley trimmed its second-quarter growth estimate by one-tenth of percentage point to a 3.2 percent annual rate, while JPMorgan lowered its forecast to 2.6 percent from 2.7 percent.

The government will release its first snapshot of second-quarter GDP next Wednesday. The economy contracted at a 2.9 percent rate in the first three months of the year, with business spending on equipment falling at a 2.8 percent rate.

But the report offered optimism for the third quarter. Core capital goods orders rebounded 1.4 percent in June.

"The momentum in core orders in the second quarter bodes well for equipment and software spending in the second half of the year," said Michael Gapen, a senior economist at Barclays in New York.

MAY ORDERS REVISED DOWN

Some economists, however, worry that business investment might not pick up much after May's core capital goods orders were sharply revised down to show a 1.2 percent decline instead of the previously reported 0.7 percent increase.

"The weakness late in the quarter implies a soft trajectory for capital spending heading into the third quarter," said Michael Feroli, an economist at JPMorgan in New York.

"All in all, it's nice to see that capital expenditure has rebounded from its first-quarter hole, but the latest data do nothing to indicate that capital spending is about to shift into higher gear."

Other details of the report painted a fairly upbeat picture of manufacturing, consistent with other data on factory activity. Orders for long-lasting manufactured goods increased 0.7 percent in June as demand increased from transportation to machinery and computers and electronic products.

The increase in orders for these goods, which range from toasters to aircraft that are meant to last three years or more, followed a 1.0 percent drop in May.

Unfilled orders increased 0.8 percent last month after rising 0.7 percent in May, showing a building up of backlogs that will keep the nation's factories busy for a while.

Durable goods inventories rose 0.4 percent. That supports views inventories would be a boost to second-quarter growth. A slow pace of inventory accumulation was behind the sharp contraction in output in the first quarter.

"It is further encouragement that the economy will return to growth in the second quarter and should continue to be strong through the remainder of 2014," said Tim Quinlan, an economist at Wells Fargo Securities in Charlotte, North Carolina.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)