* US GDP, jobless claims data disappoint investors
* Big manufacturers, Exxon Mobil weigh on the Dow
* Biotechs lift Nasdaq on deal news
* Dow off 1 pct, S&P 500 off 0.6 pct, Nasdaq up 0.5 pct
(Updates to afternoon, changes byline)
By Steven C. Johnson
NEW YORK, July 31 (Reuters) - The Dow industrials and the
S&P 500 fell on Thursday as disappointing growth and
employment data heightened concerns about the economy's health
and the outlook for corporate profits.
But news of a proposed buyout of ImClone Systems Inc
<IMCL.O> buoyed biotechnology shares, keeping the Nasdaq in
positive territory.
Investors unloaded some shares of big manufacturers,
including Caterpillar Inc <CAT.N>, down nearly 3 percent, and
Boeing Co <BA.N>, off more than 2 percent.
Data showing weaker-than-expected second-quarter growth
and a rise in the number of Americans applying for jobless
benefits soured market sentiment a day before the government
is due to release its closely watched July payrolls report.
A profit miss for Exxon Mobil Corp <XOM.N> drove the
energy giant's stock down 3 percent and was a top drag on both
the Dow and the S&P 500. For details, see []
"Investors are on edge," said Alan Lancz, president of
Alan B. Lancz & Associates Inc., an investment advisory firm,
based in Toledo, Ohio. "This morning's economic numbers were
disappointing. Unemployment is a concern. The economy is still
growing but it's definitely slow growth."
The Dow Jones industrial average <> was down 113.58
points, or 0.98 percent, at 11,470.11. The Standard & Poor's
500 Index <.SPX> was down 7.96 points, or 0.62 percent, at
1,276.30. The Nasdaq Composite Index <> was up 12.29
points, or 0.53 percent, at 2,342.01.
The Nasdaq rose after Bristol-Myers Squibb Co <BMY.N>
offered to buy out the remaining stake in biotech partner
ImClone. For details, see []. ImClone shares
notched their biggest one-day advance in 13 years, up 37.2
percent at $63.69.
But on the New York Stock Exchange, Exxon Mobil's shares
slid to $81.78, while those of Caterpillar, the maker of
excavators and bulldozers, fell to $70.01. Shares of plane
maker Boeing <BA.N> declined 2.3 percent to $62.20.
Shares of ConocoPhillips <COP.N> and Chevron <CVX.N> fell
about 2 percent as oil prices <CLc1> dropped more than $2 a
barrel.
Walt Disney <DIS.N>, a Dow component, shed 3.9 percent to
$30.45 after the company said park bookings were flat.
Cleveland Rueckert, a research associate at Birinyi
Associates in Stamford, Connecticut, said some of the losses
were the result of investors taking profits at month-end.
But the economic data also did little to lift investors'
spirits. Government data showed the U.S. economy grew at a 1.9
percent annual rate in the second quarter, below the 2 percent
reading forecast by analysts in a Reuters poll.
According to another report, the number of U.S. workers
filing new claims for jobless benefits jumped 44,000 last
week, above the Wall Street consensus. []
But another key indicator showing business activity in the
U.S. Midwest rose unexpectedly in July. []
Analysts polled by Reuters expect Friday's payrolls data
to show the economy shed another 75,000 jobs in July.
Strategists, though, said a better number could spark a market
rally, especially after a separate report from ADP Employment
Services on Wednesday showed a surprising increase in
private-sector jobs in July.
"If payrolls beats expectations, I would expect a very
strong day in the market," Rueckert said.
(Additional reporting by Ellis Mnyandu; Editing by Jan
Paschal)
