Stocks finished a back-and-forth session mixed today as investors grappled with weaker-than-expected economic data and weighed the chances of the Federal Reserve lowering interest rates.

Fed Chairman Ben Bernanke is expected to speak tomorrow at the central bank’s annual conference in Jackson Hole, Wyo., and said in a letter yesterday to Senator Schumer that Fed policymakers are “prepared to act as needed” if the market’s turmoil damages the economy. The Fed’s next meeting is September 18, but some on Wall Street expect the central bank could act sooner.

The Commerce Department said second-quarter gross domestic product grew 4.0% – its fastest pace in more than a year, and well above the 0.6% increase in the first quarter. But the broadest measure of economic health came in slightly lower than many anticipated, and the report also suggested that business investment, not consumer spending, was the main driver of growth.

In a sign that Americans’ spending power may keep declining, the Labor Department said American jobless claims rose last week to the highest level since April. Employment has been one of the stronger pillars of the economy recently, enabling robust consumer spending.

Considering how sluggish consumer spending has been this quarter, it’s likely to post its worst back-to-back quarterly performance since early 2000, a chief economist at Commonfund, Michael Strauss, said. And given all of the mortgage market troubles, “there is a growing challenge for the economy to continue to grow at a 2.5% pace in second half of the year,” he said.

To some investors, that’s not bad news, because weaker-than-anticipated economic readings bolster the argument for a rate cut, which could loosen up the credit markets.

The Dow fell 50.56, or 0.38%, to 13,238.73 after dropping about 100 points early in the session.

Broader stock indicators finished mixed. The Standard & Poor’s 500 index fell 6.12, or 0.42%, to 1,457.64, while the Nasdaq rose 2.14, or 0.08%, to 2,565.30.

In other economic news, the Office of Federal Housing Enterprise Oversight said American home prices rose just 0.1% in the second quarter compared to the first quarter, the lowest quarterly increase since 1994.

A worse-than-expected quarterly earnings report from Freddie Mac due to troubles in mortgage lending fed some selling early in the day, as did signs that companies are still finding that demand is low for commercial paper.

In addition, Lehman Brothers lowered its ratings on investment banks, stirring concerns about how well their profits will hold in a market where its tougher and more expensive to get deals done. Goldman Sachs Group Inc., Merrill Lynch & Co., and Morgan Stanley lost ground. Goldman fell $2.34 to $171.38, Merrill Lynch slid 93 cents to $72.18, and Morgan Stanley fell $1.05 to $60.16.

In one possible bright spot, some investors regard the outlook for the technology sector as decent, giving the technology-dominated Nasdaq composite index an especially large boost.