Stocks ended flat for the day as news of a Chrysler bankruptcy filing quashed the day's gains.
The Dow Jones Industrial Average fell 17.61 points, or 0.2 percent, to close at 8,168.12. The Nasdaq gained 0.3 percent, while the S&P 500 shed 0.1 percent.
But for the month of April, all three indexes ended higher. The Dow gained 7.4 percent, bringing its two-month total to about 15 percent, its best two-month streak since April 1999. The S&P jumped 7.4 percent and logged its best two-month streak since 1975. The Nasdaq advanced 12 percent, capping its best two months since 2002.
The month's best performers were financials, which shot up 22 percent, followed by consumer discretionary and industrials.
American Express was the Dow's best performer this month, gaining 85 percent, followed by Bank of America and Caterpillar.
Merck was the Dow's worst performer in April, falling 9.4 percent, followed by Wal-Mart and McDonald's.
President Obama said Friday that Chryslerwill file for bankruptcy protectionand that a partnership with Fiat will help it to "not only survive but thrive."
Publicly-traded automakers General Motors and Ford spiked after the news, gaining 6.1 percent and 9.7 percent, respectively, while the broader market pulled back.
Shares of JPMorgan , the largest lender to Chrysler, dropped 4.3 percent.
The market had been rallying all morning as traders saw glimmers of hope in the bad news, like yesterday's GDP report, where the market focused on the drop in inventories as an indicator that companies have really pared down and may have to start manufacturing and stocking up soon.
In today's economic news, jobless claims unexpectedly fell by 14,000last week to 631,000, though continuing claims hit another record, 6.271 million. Jobless claims typically peak about a month before a recession is over.
Meanwhile, personal income fell 0.3 percent in March, while spending dropped 0.2 percent. Both came in worse than expected. The personal savings rate climbed to 4.2 from 4.0.
Investors were also encouraged by the Fed's statement Tuesday. The central bank said the pace of economic deterioration appears to be slowing, the first time the Fed has made such an observation since the recession began.
Over in the financial sector, Bank of America shares gained 2.9 percent after shareholders stripped CEO Ken Lewis of his chairman title. He will continue to be CEO and hold a seat on the board. Walter Massey will succeed him as chairman.
On the earnings front, Proctor & Gamble , maker of Gillette razors and Tide laundry detergent, soared past forecasts butclipped its outlook. Shares fell 1.9 percent.
Rival Colgate Palmolive also beat expectations, helped by cost cuts, and expects a profit for the remainder of the year. Its shares fell 1.2 percent.
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ExxonMobil , which had been delivered blockbuster quarters when oil was soaring, missed its target.Its shares fell 2.6 percent.
Viacom fell 5 percent after the media conglomerate reported its profit shrunkamid a drop in cable ratings.
Shares of Dow Chemical surged 18 percent after the company delivered a surprise first-quarter profit due to cost-cutting efforts.
Motorola fell 7.2 percent after the handset maker lost more than expected as mobile-device sales tumbled 45 percent from a year earlier.
After Wednesday's closing bell, Visa beat earnings expectationsafter the credit-card company raised prices. Shares rose 2.3 percent Thursday.
Starbucks also topped forecasts, despite an 8-percent drop in sales. The coffee chain also announced it would close almost 1,000 stores around the world. Shares jumped 5.6 percent.
The World Health Organization raised its swine flu-threat level to 5, which means human-to-human spread has occured in at least two countries in one WHO region and that "a pandemic is imminent." (See the WHO explainer on pandemic threat levels.)
Still to Come:
FRIDAY: Auto sales; Fed's Geithner, Bullard speak; Reuters/Univ of Mich consumer confidence; ISM manufacturing index; factory orders; Earnings from Chevron, Clorox, MasterCard and Simon Property
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