The stock market eked out a gain Friday as investors took downbeat economic news in stride.
The modest gains still left stocks with a loss for the week but the Dow Jones industrial average and the Standard & Poor's 500 index logged their best month since November.
The latest bad news came from several corners including the financial industry. Insurer American International Group Inc. reported a larger than expected fourth-quarter loss. The company said its primary insurance business was hurt in part by the economy.
The National Association of Realtors said sales of previously occupied homes fell 7.2 percent in January. It marks the second straight month of a big drop. Analysts had predicted a gain. The Realtors' report comes two days after the Commerce Department said that new home sales fell last month.
Meanwhile, the Commerce Department reported that the nation's economy grew at a faster pace than initially estimated for the end of 2009. The stronger growth from the third quarter to the fourth quarter was welcome news but analysts say much of the gain is tied to businesses rebuilding inventories. Gross domestic product grew at an annual rate of 5.9 percent, above the 5.7 percent previous estimate. Growth is expected to slow in the coming quarters.
The mixed reports added to investors' confusion about the economy. Analysts are divided over whether a recovery is on track. That has led to swings in the stock market after nearly a year of huge gains. Major stock indexes were strong in February but are down about 1 percent for the year. This week, stocks have fallen, jumped and slid again as worries about the economy intensified and eased.
"We're in a time period where the range of potential outcomes is probably wider than it's been for some time," said Colleen Supran, a portfolio manager at Bingham, Osborn & Scarborough in San Francisco. She pointed to concerns about everything from unemployment and housing to heavy debt loads in Greece and other parts of Europe causing another recession.
"Are we going to have a double dip? Are corporations going to be able to grow earnings? That's sort of the bottom line for stock prices in the long run."
The Dow rose 4.23, or less than 0.1 percent, to 10,325.26. It fell 0.7 percent for the week but rose 2.6 percent for the month. That's the best run since it jumped 6.5 percent in November.
The broader S&P 500 index rose 1.55, or 0.1 percent, to 1,104.49. It fell 0.4 percent for the week and climbed 2.9 percent in February.
The Nasdaq composite index rose 4.04, or 0.2 percent, to 2,238.26. It fell 0.3 percent for the week. For February, the gain came to 4.2 percent.
Bond prices rose, pushing yields lower. The yield on the benchmark 10-year Treasury note fell to 3.62 percent from 3.64 percent late Thursday.
The dollar fell against other major currencies. Gold rose.
Crude oil rose $1.49 to $79.66 per barrel on the New York Mercantile Exchange.
Trading volume was light Friday in part because of a winter storm hitting the Northeast. More than 20 inches fell in New York's Central Park.
Investors were unwilling to make big moves ahead of economic reports next week. Most important, the Labor Department is expected to release its February payrolls report on Friday. Reports are also due on personal income and spending, manufacturing, construction spending and home sales.
Inconsistent reports are a part of economic recoveries but the size of the problems like unemployment and housing have brought concerns that a recovery will stall.
"It's just complicating the ability to forecast with any degree of confidence how this is all going to settle out," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
The questions about the economy have been tugging at the market. Stocks fell Monday and Tuesday after Lowe's Cos. and Campbell Soup Co. warned that consumer spending will be slow to recover and after a drop in consumer confidence. The market then barreled higher Wednesday after Federal Reserve Chairman Ben Bernanke reiterated that interest rates would stay low to help the economy. On Thursday, stocks plunged and then recovered most of their losses as concerns shifted about unemployment and Greece.
"It really speaks to the level of angst that's out there," Luschini said, referring to the swings.
The report from AIG brought a reminder of the strains that still exist in the financial system. AIG said it lost $8.87 billion in the fourth quarter of 2009. That's improved from a year earlier but weaker than analysts expected. AIG fell $2.74, or 10 percent, to $24.77.
Private equity firm Thomas H. Lee Partners said it is planning to acquire the parent of Carl's Jr. and Hardee's restaurants. The offer for CKE Restaurants Inc. totals $619 million in cash and $309 million in debt. Analysts like to see takeovers because it is a sign of confidence in the economy. CKE jumped $2.46, or 27.6 percent, to $11.37.
Meanwhile, a fifth straight monthly increase in the Chicago Purchasing Managers Index provided some hope about the strength of manufacturing. The Chicago PMI rose to 62.6 in February from 61.5 in January.
Three stocks rose for every two that fell on the New York Stock Exchange, where consolidated volume came to 4.22 billion shares compared with 4.58 billion Thursday.
The Russell 2000 index of smaller companies fell 1.90, or 0.3 percent, to 628.56.
Overseas, markets rose after improved economic reports in Britain and Japan boosted optimism about a global recovery. The U.K. government revised higher its estimate of the nation's economic growth for the fourth quarter. In Japan, output from factories rose by more than expected in January and February retail sales jumped.
Britain's FTSE 100 rose 1.5 percent, Germany's DAX index gained 1.2 percent, and France's CAC-40 rose 1.9 percent. Japan's Nikkei stock average rose 0.2 percent.
For the week
The Dow Jones industrial average closed the week down 77.09 points, or 0.7 percent, at 10,325.26. The Standard & Poor's 500 index fell 4.68, or 0.4 percent, to 1,104.49. The Nasdaq composite index fell 5.61, or 0.3 percent, to 2,238.26.
The Russell 2000 index, which tracks the performance of small company stocks, fell 3.06, or 0.5 percent, for the week to 628.56.
The Dow Jones U.S. Total Stock Market Index — which measures nearly all U.S.-based companies — ended at 11,343.17, down 48.18, or 0.4 percent.