Mixed Day on Wall Street

Among economic data, the government reported that the domestic economy performed slightly better during the second quarter than initial reads had indicated. The Commerce Department said gross domestic product rose 4% last quarter, up from an advanced reading 3.4%.

Economists expected an upward revision to 4.1%. The year-over-year change in inflation was cut to 1.3% from 1.4%, and marked the lowest level in four years.

The GDP report was the second of three that will be released on the second quarter.

The Labor Department said initial jobless claims unexpectedly rose by 9,000 last week to 334,000. The less-volatile four-week moving average increased by 6,250 to 324,500.

Earnings were also in focus. H&R Block (HRB Quote) posted a fiscal first-quarter loss due to issues with its mortgage lending arm. Still, shares climbed 34 cents, or 1.7%, to close at $19.84.

Lending trouble also hit Freddie Mac (FRE Quote), which posted a 45% drop in second-quarter profit because of bad loans, missing Wall Street's target. Freddie Mac shed $3.18, or 5%, to $60.07.

Second-quarter profits also declined at Tiffany (TIF Quote), but the luxury-goods retailer still beat estimates and raised its full-year 2008 guidance. Tiffany rose $1.28, or 2.7%, to $49.40.

Also in the retail sector, Sears Holdings (SHLD Quote) said after the last close that both net income and sales fell during the second quarter. Results beat the Thomson First Call estimate on a per-share basis, but revenue was lower than expected.

Sears ended lower by $3.78, or 2.6%, to $141.83.

Meanwhile, Merrill Lynch downgraded the world's largest retailer, Wal-Mart (WMT Quote), to sell from neutral, citing shrinking margins. Shares lost 87 cents, or 2%, to $43.32.

After the bell, Dell (DELL Quote) reported a 46% rise in second-quarter profits, with sales topping Wall Street targets.

Away from stocks, the front-month October crude contract fell by 15 cents to close at $73.36 a barrel.

Treasury bonds were on the rise. The 10-year note added 15/32 in price, cutting the yield to 4.50%. The 30-year bond was up 29/32 in price to yield 4.82%.

Asian markets advanced overnight. Japan's Nikkei 225 gained 0.9%, and Hong Kong's Hang Seng jumped 2%. European bourses were also higher. London's FTSE 100 gained 0.9%, and Germany's Xetra Dax gained 0.7%.