* Q2 GDP shrinks 1 percent, less than expected * Energy shares hurt by weaker oil * Boeing shares fly after 787 schedule announcement * Dow off 0.01 pct, S&P 500 off 0.4 pct, Nasdaq off 0.8 pct (Updates to midday, changes byline)
By Leah Schnurr
NEW YORK, Aug 27 (Reuters) - U.S. stocks slipped on Thursday, with energy shares falling alongside oil prices as investors tapped the brakes on an August rally that has taken the market to 10-month highs.
Investors were underwhelmed by data that showed the economy shrank less than expected, but was unchanged from last month's estimate.
Analysts have pointed to light summer volume and caution over a potential pullback as the reason for the market's lackluster performance this week.
Adding to that caution are concerns that an economic recovery may end up being weaker or slower than originally anticipated. Expectations of a recovery have fueled a months-long market run that has pushed the S&P 500 up more than 50 percent from March's 12-year lows.
"People are starting to say this may not be the V-shaped recovery that everyone is talking about, so I might want to take a little bit off the table," said Doug Roberts, chief investment strategist at Channel Capital Research.com in Shrewsbury, New Jersey.
Energy shares tumbled as crude oil futures fell more than 1 percent on concerns about swollen inventories. Chevron Corp shares dropped 1.1 percent to $70.29, and the S&P energy index lost 1.6 percent.
Tech shares also fell after being among the leaders of the hefty rally. Among the Nasdaq's major decliners, Research In Motion fell 2.2 percent to $73.17. The PHLX semiconductor index was off 0.8 percent, with SanDisk Corp down 1.2 percent at $17.46.
The Dow Jones industrial average was off 0.61 of a point, or 0.01 percent, at 9,542.91. The Standard & Poor's 500 Index slipped 4.18 points, or 0.41 percent, to 1,023.94. The Nasdaq Composite Index lost 15.49 points, or 0.77 percent, to 2,008.94.
Boeing Co, however, limited the Dow's decline with a nearly 9 percent gain after the big U.S. aircraft manufacturer and defense contractor announced a schedule for it long-delayed 787 Dreamliner. Boeing was up at $52.08.
The stock of bailed-out insurer American International Group Inc surged 30 percent to $48.98 after the new chief executive, Robert Benmosche, told Reuters on Wednesday he did not favor a fire sale of its assets. He also said in the interview that in a year, people will say the company is performing well.
AIG's stock price has spiked since the beginning of August in a rally initially spurred as the insurance giant posted its first profit in seven quarters. Analysts have also cited a short squeeze as contributing to the run-up as short investors have given up on bearish bets.
According to data from the New York Stock Exchange, short interest in AIG fell 2 percent in the first half of August, compared with the end of July. About 18 percent of the stock is held short.
A Commerce Department report showed gross domestic product fell at an annual rate of 1 percent, while the Labor Department reported that the number of people filing new claims for jobless benefits fell last week, supporting the belief the economy was starting to heal. Nonetheless, new jobless claims totaled 570,000, slightly higher than expected. (Editing by Jan Paschal)