Stocks waver despite upbeat data

The Dow Jones industrial average rose 203.82 points to close on Thursday at 10,005.96

Stocks ended higher on Wall Street but well off their best levels of the day as volatility continued to tug at the market.

The Dow Jones industrial average rose 76.71, or 0.8%, to close on Monday at 9,789.44. It rose 146 points at one point in the day.

The Standard & Poor's 500 index rose 6.69, or 0.7%, to 1,042.88, while the Nasdaq composite index rose 4.09, or 0.2%, to 2,049.20.

Stocks jumped early in the day after strong reports on manufacturing and housing but were fluctuating by the afternoon.

The market has been volatile in recent days as investors try to determine whether the bets they have been placing on a rebound in the economy over the past several months are still sound.

The worry is that the pace of recovery the market has been counting on may be hard to maintain. The government reported 3.5% growth in third-quarter GDP last week but much of that growth came from government spending. Likewise many companies are reporting stronger than expected earnings, but many of those gains came from cost-cutting instead of higher sales.

The seesaw trade came after the Institute for Supply Management reported that manufacturing activity grew in October at the fastest pace since April 2006. The ISM index clocked in at 55.7, much better than the 53 economists had expected. It was the third month in a row the index came in above 50, which indicates growth.

Meanwhile, the National Association of Realtors said pending home sales increased for the eighth straight month in September. The index rose 6.1% from August to 110.1. It was the highest reading since December 2006 and more than 21% above a year ago. Economists had expected the index would be level at 103.8.

Stocks had posted their biggest losses in four months on Friday after rising sharply a day earlier on the stronger-than-expected GDP figures. Friday's losses helped send the Standard & Poor's 500 index into the red for October, breaking a seven-month streak of gains. Even with the S&P 500's 2% loss in October, the index is still up 53.2% since hitting a 12-year low in March.

"The question is, is the trend changing?" said Jim Dunigan, managing executive of investments at PNC Wealth Management. "We've been in an up trend here."