NEW YORK -- Wall Street closed out its first winning month since spring, a feat that vastly overshadowed a lackluster session. Stocks ended Thursday's session mixed, but the Dow Jones industrials had their second-best October on record.
Stocks struggled Thursday after the latest batch of discouraging economic data. But analysts said investors are still feeling upbeat after the market's three-week rally on better-than-expected earnings news and have growing hopes the bear market was over.
"What is important to remember is that October has frequently been a bear market killer. That is to say, that bear markets have ended in October," said Alan Ackerman, executive vice president at Fahnestock & Co. "It is too early to tell if that is the case" this time.
The Dow closed down 30.38, or 0.4 percent, at 8,397.03.
The market's broader indicators were mixed. The Nasdaq composite index rose 3.02, or 0.2 percent, to 1,329.75. The Standard & Poor's 500 index fell 4.95, or 0.6 percent, to 885.76.
For the month, the Dow rose 10.6 percent but came in behind the 13.8 percent gain of October 1987. The Nasdaq rose 13.5 percent in October, while the S&P advanced 8.7 percent. The last time Wall Street's gauges ended a month higher was March.
But October's gains failed to lift the market from dreadful lows reached earlier this year. The Dow has a year-to-date loss of 16.2 percent, while the Nasdaq has plunged 31.8 percent and the S&P has slid 22.9 percent.
Much of October's success is owed to third-quarter earnings reports that have been surprisingly strong. Seasonally, this also is the best time of year for stocks as companies and consumers increase their spending and earnings pick up.
Analysts said the market was due for a pull back.
"We had a terrific three-week run and it is normal for investors to then take a wait-and-see attitude," said Arthur Hogan, chief market analyst at Jefferies & Co.
Thursday's economic news was somewhat disappointing and gave investors reason to be cautious. The Commerce Department report that the U.S. economy grew at a 3.1 percent annual rate in the summer was short of the 3.6 percent clip that analysts had expected.
And the Purchasing Management Association of Chicago reported that its index of business activity fell to 45.9 in October. It was the second straight month with a reading below 50, which indicates contraction in the economy.
The index is considered a harbinger of the Institute for Supply Management's national survey on manufacturing, due to be released Friday.
The economic news left some investors hoping that the Federal Reserve would lower interest rates when it meets next week. But it was unclear what effect the possibility of a rate reduction was having on Wall Street. Some analysts say the market would prefer no cuts if that means the Fed is able to say that the economy is turning around.
Among Thursday's losers, ChevronTexaco dropped $3.77 to $67.63 on third-quarter earnings that missed analysts' expectations by 12 cents a share.
Goodyear Tire fell $1.01 to $7.10 after J.P. Morgan warned about the company's outlook. And Standard & Poor's placed the company on a credit watch due to concern over its financial performance compared with expectations.
But data storage company EDS climbed $1.31 to $15.06 after reporting earnings of 18 cents a share, which beat the company's own scaled-back expectation for a gain of 12 cents to 15 cents a share, but was well short of year-ago results. EDS also announced it would cut 1,000 jobs. And Clorox climbed $3.47 to $44.93 after Goldman Sachs raised its rating to "recommended list" from "market outperform."
The Russell 2000 index, the barometer of smaller company stocks, fell 0.67, or 0.2 percent, to 373.50.
Advancing issues narrowly outnumbered decliners 7 to 6 on the New York Stock Exchange. Consolidated volume totaled 2.05 billion shares, ahead of Wednesday's 1.78 billion.
Overseas, Japan's Nikkei stock average finished Tuesday down 1.3 percent. In Europe, France's CAC-40 rose 2.1, Britain's FTSE 100 gained 0.9 percent, and Germany's DAX advanced 1.3 percent.