NEW YORK (AP) – Stocks traded flat Friday as investors weighed a weaker-than-expected estimate of first-quarter economic growth with fresh evidence that corporate profits remain robust.

The Commerce Department reported that the American gross domestic product, the broadest measure of the economy, grew at an annual rate of 1.3 percent in the first quarter, its slowest pace in four years. The figure was below the average economist forecast and down sharply from 2.5 percent in the previous quarter. The government data also showed that pricing pressures were rising – stirring concern that American consumers may curb spending.

The findings helped push the dollar to an all-time low against the 13-nation euro, which rose as high as $1.3682.

Keeping stocks afloat, however, was another round of robust earnings reports – notably from Microsoft Corp., one of the 30 companies that make up the Dow. So far, 22 of the 30 Dow components have reported earnings, and 16 have exceeded expectations.

“I think the reason the market appears to be doing better than the economy right now is the decent job managers are doing at incorporating improvements in productivity,” said Rob Lutts, chief investment officer at Cabot Money Management. “Corporations are making gains on the bottom line without making gains on the top line,” he said, referring to earnings and revenue.

In midday trading, the Dow Jones industrial average rose 9.83, or 0.08 percent, to 13,115.33. The Dow surpassed 13,000 for the first time Wednesday and eked out another gain Thursday that nudged the blue chips to their 36th record close since October. Thursday’s trading marked the 18th increase in 20 sessions for the Dow, the first time such a streak has occurred since 1929.

Broader indexes were mixed Friday. The Standard & Poor’s 500 index fell 1.61, or 0.11 percent, to 1,492.64, while the technology-dominated Nasdaq composite index rose 0.87, or 0.03 percent, to 2,555.33.

The S&P 500 is about 2 percent below its high of 1,527.46, reached in March 2000. The Nasdaq is slightly above the halfway point to its high, which also came in March 2000.

Investors are trying to determine where the economy is headed and how policy makers and corporate America will react; slowing economic growth typically compels the Federal Reserve to lower interest rates, but rising inflation could prevent such a cut. Meanwhile, a weak dollar helps exporters, but hurts importers.

“As long as our economy doesn’t really slow down and go into big negative mode, then profits can continue to grow and the markets will probably do OK,” Lutts said, noting that while the economy slowed in the first quarter, it did not contract.

Though the American economy has been cooling, market participants have been buying up stocks in large part because corporate profits are still rising. American companies that also operate abroad have drawn sizable profits from countries with stronger economies and currencies.

“Every company has a little bit different story, but those that are being well-managed and having good growth are producing good results. Generally we’re seeing pretty good numbers.”

Microsoft is among the companies lending support to investor sentiment. The software maker jumped $1.22, or 4.2 percent, to $30.32, after reporting a 65 percent surge in earnings amid strong sales of its new Windows Vista operating system and Office 2007 software suite.

Waste Management Inc. rose $2.77, or 7.8 percent, to $38.12 after the nation’s largest garbage hauler turned in a 19 percent increase in its first-quarter earnings in part because of growth at its commercial collection and landfill businesses.

Goodyear Tire & Rubber Co. reported a loss for the first quarter compared with a profit a year earlier but pleased Wall Street with word it would dig deeper to trim costs and that a recovery from a strike was proving less onerous than expected. Goodyear rose $2.44, or 7.5 percent, to $34.94.

Airline stocks fell, however, after JPMorgan lowered its rating on several carriers, seeing little cause for the stocks to move higher. American Airlines parent AMR Corp. fell 93 cents, or 3.4 percent, to $26.75, while Continental Airlines Inc. dropped $1.78, or 4.6 percent, to $37.

Along with profit news, corporate takeover activity continued to buoy the mood on Wall Street. On Friday, Citigroup Inc. said it successfully took over Japanese brokerage Nikko Cordial Corp. for $7.7 billion. The acquisition was the largest ever by a foreign company in Japan. As is typical of an acquiring company, Citigroup fell, slipping 10 cents to $53.46.

In addition to the GDP data, investors examined the Reuters/University of Michigan consumer sentiment index, which rose to 87.1 in April from a preliminary reading of 85.3 but fell from 88.4 in March.

Bonds were little changed, with the 10-year yield slipping to 4.69 percent from 4.70 percent late Thursday.

Light, sweet crude rose 76 cents to $65.82 per barrel on the New York Mercantile Exchange.

Gold prices rose.

Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 716.9 million shares.

The Russell 2000 index of smaller companies fell 4.12, or 0.49 percent, to 829.68.

Stock markets overseas fell. Japan’s Nikkei stock average slipped 0.16 percent, while Britain’s FTSE 100 ended down 0.78 percent, Germany’s DAX index lost 0.12 percent, and France’s CAC-40 declined 0.23 percent.

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