Economy Shrinks At Smaller Than Expected Pace

A report that the nation's economy shrank at a smaller than expected pace for the second quarter sparked hopes that the recession may be easing. The Dow added 13 points to 9167 while Nasdaq added 2 points to 1987.

On the upside

The Food and Drug Administration approved the design of Anadys Pharmaceuticals' (Nasdaq: ANDS) hepatitis C medication ANA598 drug trial.

Stone Energy (NYSE: SGY) reported lower second quarter earnings but the results beat expectations.

ArvinMeritor (NYSE: ARM) announced the closure of its Carroll County, Kentucky production plant by the end of the year.

On the downside

Synaptics (Nasdaq: SYNA) reported higher fourth quarter earnings as sales rose but the company forecast first quarter revenue that fell short of estimates prompting downgrades.

Merriman downgraded Ariad Pharmaceuticals (Nasdaq: ARIA) after the company widened second quarter losses.

Evergreen Solar (NYSE: ESLR) disappointed by widening second quarter losses.

In the broad market, advancing issues outpaced decliners by a margin of more than 5 to 3 on the NYSE and by nearly 5 to 4 on Nasdaq. The Russell 2000 which tracks small cap stocks added a point to 559.