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Wall Street rally pauses in cautious trading


08:45, August 09, 2012

NEW YORK, Aug. 8 (Xinhua) -- The rally on Wall Street lost some steam Wednesday, with major indexes wobbling in a very narrow range across the breakeven line throughout the whole session.

Both the Dow Jones industrial average and the Standard & Poor's 500 managed to extend their gains to the fourth day.

When the market closed, the blue-chip Dow added 7.04 points, or 0.05 percent, to 13,175.64, while the broader S&P 500 edged up 0. 87 points, or 0.06 percent, to 1,402.22.

The Nasdaq Composite Index dipped 4.61 points, or 0.15 percent, to 3,011.25.

The market was boosted by investors' expectations for further monetary stimulus policies from the European Central Bank and the U.S. Federal Reserve in the past three trading sessions.

The S&P 500 index closed above 1,400 for the first time since May while the tech-heavy Nasdaq topped 3,000 on Tuesday, but some analysts believed the market has been over-bought.

As the result, the market was caught by apparent caution on Wednesday, with major indexes in Wednesday's economic data continuing the recent pattern, which reflects a sluggish recovery in the world's No. 1 economy.

The U.S. Labor Department said productivity rose 1.6 percent in the second quarter of the year, beating previous expectations of 1. 3-percent gain, as companies slightly expanded output.

According to the Mortgage Bankers Association, weekly mortgage applications slipped last week as demand for new purchase and refinance loans fell.

On the earnings front, Disney posted stronger-than-expected second quarter earnings, but its revenue was lower than expected.

Meanwhile, Macy's rallied nearly 2.6 percent as the department- store chain reported a higher quarterly profit, thanks to cost controls and strong sales in July.

In Europe,Fitch ratings affirmed Germany's triple-A rating with a stable outlook, citing the country's robust economic performance over the past two years in the midst of a euro zone crisis and slowing global growth.

"Against the background of fragile global recovery and the intensification of the euro zone crisis, Germany has recorded strong GDP growth and a declining trend in unemployment, partly as a result of previous structural reforms," Fitch said in a statement.

In other markets, the U.S. dollar traded mixed against major currencies in late New York trading on Wednesday while oil prices dropped despite of bigger-than-expected inventory declines.

Light, sweet crude for September delivery slipped 32 cents, or 0.34 percent, to settle at 93.35 dollars a barrel on the New York Mercantile Exchange.


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