Wall Street Pares Early Losses to End Flat

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Wall Street Pares Early Losses to End Flat

US stocks ended mostly unchanged as investors focused on the latest batch of second quarter corporate earnings, and reports that the economy grew at a faster pace in the second quarter.

The Dow Jones Industrial Average pared losses after dropping more than 100 points in early morning trading to end flat at 17,745.58 points.

The S&P 500 Index ended almost unchanged at 2108.66 points with six of its ten Key sectors ending higher on the day. Losses in Energy and transport offset gains in materials and utilities.

The Nasdaq Composite ended 17.05 points or 0.3% higher at 5,128.78 points.

“Earnings haven’t been great,” John Canally, investment strategist at LPL Financial, told Reuters.

“We are in a slow-growth environment and anything that knocks that down further is not a plus for the market.

The Commerce department reported Thursday that US economic growth had picked up pace in the second quarter with a growth in consumer spending offsetting drags from reduced business expenditure on equipment.

According to the report Gross Domestic product expanded by a annualized rate of 2.3% in the there months ending in June while first quarter GDP growth was increased to 0.6% after it was reported to have shrunk by 0.2% earlier.

Separately, the Labor Department reported that the number of new filings for jobless benefits rose last week after hitting a 40 year low. The levels however remained at multi-decade lows showing that the economy was firmly in an upward trajectory.

The strong economic data increased trader uncertainty during Thursday’s trading session after a bag of mixed corporate results with the Federal Reserve expected to start its monetary tightening policy later this year.

“This was a very constructive report and given the supportive domestic economic backdrop, we expect this positive momentum in activity to be sustained in the coming months, providing the Fed with the necessary justification to raise rates this year – perhaps as early as September,” Millan Mulraine, deputy chief economist at TD Securities in New York., told Market Watch.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com