NEW YORK -- Wall Street had a muted reaction to upbeat reports on consumer confidence and the gross domestic product Tuesday, closing narrowly mixed as investors stayed cautious after Monday's big rally.
Analysts said many investors had anticipated the good news in the previous session, when the Dow Jones industrial average rose 119 points.
"Bottom line, the economy's overall health is playing a greater role for the time being in determining the market's direction," said Joseph Keating, chief investment officer at AmSouth Asset Management. "All the economic data since August point to the fact the economy is strong."
The Dow closed up 16.15, or 0.2 percent, at 9,763.94.
Broader market measures finished mixed. The Nasdaq composite index fell 4.10, or 0.2 percent, to 1,943.04 after Monday's advance of 53 points, or nearly 3 percent, the biggest gain for that measure in almost five months.
The Standard & Poor's 500-stock index gained 1.81, or 0.2 percent, to 1,053.89, following an advance of 16.80.
The Commerce Department said the economy grew at an 8.2 percent annual rate in the third quarter, the fastest pace in nearly two decades. Tuesday's revised gross domestic product was a full percentage point higher than the 7.2 percent growth rate estimated a month ago.
Separately, the New York-based Conference Board reported that slow but steady improvements in the job market helped push consumer confidence in November to its highest level in more than a year.
The market has fallen in recent weeks as investors grappled with a weakening dollar, which makes U.S. securities less appealing to foreign investors, and concerns that stock prices might be a bit high. Last week, the dollar slid to a new low against the euro, but recovered some on Monday to help fuel a stock rally. However, the dollar pulled back on Tuesday despite the strong economic news.
"Ever since the market bottomed in March, trading sessions showing large point gains have typically been followed by flat to slightly down days," said Richard Dickson, market analyst for Lowry Research. "Whether the market continues or breaks this pattern ... should provide a good indication of what the near-term future holds - another advance that quickly fizzles or a possible move to new rally highs."
Keating said investors, while optimistic, are a bit more hesitant given the market's large gains since hitting a low on March 11. Many investors are concerned that the Federal Reserve will soon have to raise interest rates, while others remain concerned about terrorism following bombings in Turkey last week.
"Some of the upward trajectory is behind us," Keating said. "There has been a little bit of weakening due to the fear of terrorist threats. That will take a little bit of an edge off investor bullishness."
Industrial issues, whose fortunes are closely tied to the twists and turns of the economy, were among the Dow's stronger components: Heavy equipment maker Caterpillar Inc. advanced $1.70 to $75.04, and chemical maker DuPont Co. rose 59 cents at $40.55.
Drug stocks sagged amid news that the Senate gave final congressional approval to sweeping changes for Medicare. The $395 billion measure includes a new prescription drug benefit for 40 million older and disabled Americans. Merck & Co. fell 67 cents to $41.42, and Johnson & Johnson declined 79 cents at $50.69.
Citigroup rose 14 cents to $46.88 after the bank announced a deal to buy a consumer finance business from Washington Mutual Inc. for $1.25 billion. Washington Mutual dropped $1.60 to $44.95.
Xerox Corp. advanced 82 cents to $11.44 as both Lehman Brothers and Merrill Lynch upgraded the stock following the copier company's upbeat analyst conference on Monday.
Advancing issues outnumbered decliners 9 to 4 on the New York Stock Exchange. Volume was light at 1.32 billion shares, but slightly higher than the 1.30 billion traded Monday.
The Russell 2000 index, a barometer of smaller company stocks, rose 3.67, or 0.7 percent, to 543.18.
Overseas, Japan's Nikkei stock average rose 1.1 percent. In Europe, Britain's FTSE 100 increased 0.1 percent, Germany's DAX index slipped 0.1 percent, and France's CAC-40 gained 0.2 percent.
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