In New York Thursday, GDP data and a rise in jobless claims depressed sentiment.

The Dow Jones is down 139 points or 1.22%. The Nasdaq Composite Index has risen 2 points and the S&P 500 is down down 12 points or 0.9%.

Gross domestic product grew at a seasonally adjusted 1.9% annual rate April through June, the US Bureau of Economic Analysis  Commerce Department said Thursday in the first estimate of second-quarter GDP. The increase below expectations on Wall Street. Businesses reduced inventories sharply, putting a big drag on GDP, suggesting smaller cuts in production in future.

Price inflation indicators were mixed in the second quarter. The key price index for personal consumption expenditures rose by 4.2% after increasing 3.6% in the first quarter. The PCE price indicator excluding food and energy grew 2.1%, after increasing 2.3% in the first quarter.

GDP growth in the first quarter was revised down to a 0.9% rate of increase, compared to a previously reported 1.0% rate of increase.

Finfacts Report:US GDP increased at an annual rate of 1.9% in the second quarter of 2008 boosted by exports and the tax rebates provided by the Economic Stimulus Act

The US Labor Department said today that some of the rise in weekly jobless claims related to a recent extension for up to 13 weeks of federal unemployment benefits. Some applicants for that extension actually discovered that they were eligible for new jobless benefits, a Labor Department analyst said.

Initial claims for unemployment benefits rose 44,000 to 448,000 after seasonal adjustments in the week ended July 26, the Labor Department said Thursday, the highest level since April 2003. Economists in a Dow Jones Newswires survey expected an 8,000 decline.

Claims were choppy throughout the month, due in part to seasonal adjustment volatility associated with temporary shutdowns at automakers and some other manufacturers in early July as they retool their plants. The latest numbers introduced a new source of volatility: extended benefits.

A Labor Department analyst explained that when people applied for extended benefits, "more people than we expected actually qualified for new (unemployment insurance) benefits." The latest data "represents sort of a structural shift," and analyst said, which"is going to disrupt the stability of our series."

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In Europe, the Dow Jones 600 fell 0.1% and national benchmarks declined in eight of the 18 western European markets. The U.K.'s FTSE 100 slid 0.2%; Germany's DAX gained 0.3% and France's CAC declined 0.2%.

In Dublin, the ISEQ fell 1.58% dragged down by Elan for a second day.

Elan lost 7.49% after a 32% plunge on Wednesday following inconclusive results in respect of a study of the impact of the experimental Alzheimer’s drug, “bapineuzumab”, which is produced in partnership with US drugs firm Wyeth.

Anglo Irish Bank fell over 5%.