July 30, 2010 –   * Brazil outperforms on local earnings

* Slowing U.S. second quarter growth hits Mexico

* Bovespa gains 0.84 pct, Mexico's IPC down 0.48 pct (Updates to close)

SAO PAULO/MEXICO CITY (Reuters) - Latin American stocks advanced Friday as Brazilian stocks, buoyed by strong earnings, notched their best monthly performance in more than a year.

The MSCI Latin American stocks index put on 0.68 percent, its ninth advance in the past 10 sessions. The Thomson Reuters Latin America total return index added 0.85 percent.

Brazil's benchmark Bovespa index rose 0.84 percent and registered a 10th straight session of gains. The Bovespa climbed 10.8 percent in July, marking its best month since May 2009.

"Brazilian fundamentals are strong," said Romeu Vidale of Concordia brokerage.

Among gainers Friday were shares of retailer Lojas Renner , which put on 8.22 percent and hit a new all-time high.

The company's second-quarter earnings, reported after the bell on Thursday, beat analyst expectations.

"Lojas Renner delivered EBITDA and operational margins consistently above our estimates and the market consensus," wrote analyst Juliana Campos with Ativa brokerage.

Embraer , the world's third-biggest jet maker, rose 4.45 percent and marked its highest close since October 2008.

Analysts expect the company to report an increase in second-quarter profit because of a pickup in aircraft orders and cost controls.

But Mexico's IPC index fell 0.48 percent, hurt by data showing the U.S. economy slowed its pace of growth in the second quarter.

Mexico sends about 80 percent of its exports to the United States, which is the world's largest economy and a major influence on Latin America.

"We are seeing a slower GDP number. We are getting out of the market at the current levels," said Carlos Alonso, a trader at brokerage Interacciones in Mexico City.

But a report showing that business activity in the U.S. Midwest grew more than expected helped support stocks.

The index fell around 1.5 percent for the week but rose 3.7 percent for the month of July.

Leading Latin American wireless operator America Movil shed 1.94 percent while top local retailer Wal-Mart de Mexico lost 2.42 percent.

Miner Grupo Mexico lost 0.71 percent.

Chilean stocks were supported by an unexpected drop in the unemployment rate during the second quarter on new jobs in manufacturing, retail and construction as the economy recovered from an earthquake, government data showed.

"The U.S. GDP figure ... sent everything down this morning," said Sebastian Rauff, a trader with the Scotia Bank brokerage in Santiago. "But at the local level the employment figure was a pleasant surprise," he added.

Chile's blue chip IPSA index edged up 0.16 percent.

Shares of airline LAN gained 4.25 percent. The company earlier this week reported a surge in January-June net profit.

Retailer Falabella rose 0.99 percent. (Reporting by Luciana Lopez in Sao Paulo and Michael O'Boyle in Mexico City; Additional reporting by Aluisio Alves in Sao Paulo and Brad Haynes in Santiago; Editing by Dan Grebler)