Stocks see-sawed after economic readings on consumer sentiment and business activity offset disappointment with a lower-than-expected GDP report.
The Dow Jones Industrial Average fell slightly after rising more than 20 points and falling more than 80 points earlier. Boeing , Bank of Americaand Alcoa led advancers. Merckand Microsoft led decliners.
Still, the Dow has gained more than 7 percent in July, putting it on track to post the biggest monthly percentage increase and best July gain since July 2009, when it rose 8.6 percent.
The S&P 500and Nasdaqwere also mixed during the morning session.
Reuters/University of Michigan reported their gauge of consumer sentiment index for July came in better than expected at 67.8, which still represents a steep drop from a reading of 76.0 in June. The late July figure was better than the 66.5 reported earlier in July. Sentiment is now at the lowest level in 9 months, largely due to the poor outlook for jobs.
"Rather than an economy gaining strength, consumers now anticipate a slowing pace of growth, and rather than economic policies acting to improve prospects, economic uncertainty among consumers has greatly increased," Richard Curtin, director of the surveys, said in a statement.
The Chicago Institute for Supply Management's business barometer rose to 62.3 in July from 59.1 in June, and better than the forecasted reading of 56.5. The boost came from higher employment and orders.
Gross domestic product rose 2.4 percent, according to the government's preliminary estimate, against consensus expectations of 2.5 percent.
One positive sign in the GDP report was a 29.1 percent rise in spending on equipment and software, its strongest growth since the third quarter of 1997.
"What it means is that the recovery wasn’t going to be led by consumers, it was going to be led by inventory rebuild, so capital spending really takes off," Benjamin Pace of Deutsche Bank Private Wealth Management said on CNBC Friday morning.
Since today's economy is dominated by technology companies, as those businesses start spending, "there will be employment growth in those areas and that should help keep the economy moving in 2011," Pace said.
Chevronbeat expectations for both earnings and revenue, helped by higher oil prices, but was trading lower Friday. The energy sector was mixed after a strong week of earning results from Chevron rivals, including Exxon Mobil, Royal Dutch Shell and ConocoPhillips.
Merck reported its profit fell 52 percent amid hefty merger and restructuring charges, putting pressure on share prices Friday. Still, the results beat expectations and the drug giant also delivered a forecast in line with analysts' expectations.
Tech stocks remained under pressure after chipmakers Nvidia and Symanteccut expectations on Thursday for the next quarter. Also, several brokerages lowered price targets for both companies.
Motorola fell more than 1 percent after reporting quarterly earnings and revenue Thursday that was better than expected, due to greater demand for products such as mobile network equipment. Microsoft and Intel were also down more than 1 percent.
So far, nearly two-thirds of the S&P 500 has reported earnings, with 75 percent beating expectations.
JPMorgan Chase raised its 2010 earnings outlook on the S&P 500 to $84 a share from $81 a share, citing strong second-quarter results and a recovery in Europe.
"Corporate profits remain the acid test of business conditions, and with top line up 12.2 percent year-over-year, economic conditions remain favorable for businesses to generate solid profits," JPMorgan said in its U.S. Equity strategy note.
Citigroup settled charges with the SEC on Thursday that it failed to disclose subprime exposure to investors in 2007.
BP CEO Tony Hayward said he did everything he could do to respond to the Gulf oil spill in an interview with the Wall Street Journal. Also, BP's Russian joint venture partner TNK-BP said it is considering buying BP's Venezuelan assets as way to expand its international busineses.
Disney has agreed to Miramax for more than $660 million to Filmyard Holdings.
MetLife, the biggest U.S. life insurance company, posted a second-quarter profit of $1.53 billion late Thursday, helped by higher premium revenue from sales domestically and abroad.
New York's attorney general has subpoenaed MetLife and Prudential Financial as part of a probe into whether life insurers are defrauding families of deceased military personnel by siphoning off millions of dollars of death benefits for themselves. Both stocks rose more than 2 percent Friday.
Amgen reported better-than-expected second-quarter profit late on Thursday and the world's largest biotechnology company said the launch of its new osteoporosis drug Prolia was progressing as planned.
Google said its earlier report that Internet search services in China were being fully blocked could have been the result of a technical glitch that overstated the problem.
Li Lu, a Chinese-American investor and hedge fund manager, could be in line to take a top investment role at Warren Buffett's Berkshire Hathaway and even succeed the legendary U.S. investor, the Wall Street Journal reported on Thursday.