October 26, 2012-Markets Edge Higher Failing to Sustain Early Gains

Stocks once again failed to sustain an early upward move, reflecting the recent downward momentum for the markets. The major averages subsequently showed a lack of direction on the session, ending the day nearly flat. The major averages finished the day mixed, with all three nearly unchanged. While the S&P 500 dipped 1.03 points or 0.1 percent to 1,411.94, the Dow inched up 3.53 points or less than a tenth of a percent to 13,107.21 and the Nasdaq edged up 1.83 points or 0.1 percent to 2,987.95. For the week, the major averages all moved lower due largely to the sell-off seen on Tuesday. The Nasdaq slipped 0.6 percent, while the Dow and the S&P 500 fell 1.8 percent and 1.5 percent, respectively. The initial strength on Wall Street was partly due to a positive reaction to the Commerce Department's initial report on third quarter GDP, which showed stronger than expected economic growth. The report showed that U.S. gross domestic product rose by 2.0 percent in the third quarter following a 1.3 percent increase in the second quarter. Economists had been expecting third quarter GDP to increase by about 1.8 percent. The stronger than expected GDP growth reflected positive contributions from consumer spending, federal government spending, and residential fixed investment.