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Friday, October 26, 2012

Earnings keep stocks 'stuck in a rut' (ext.CNN)

NEW YORK (CNNMoney) -- U.S. stocks closed with slim gains Thursday, as investors weighed better-than-expected economic data against concerns about corporate earnings.

The Dow Jones Industrial Average and Nasdaq rose 0.2%, while the S&P 500 rose about 0.3%.

While earnings expectations were low, the third quarter is shaping up to be a disappointment, said David Levy, a portfolio manager at Kenjol Capital Management in Austin, TX.

"Overall, earnings are the main reason the market has been stuck in a rut for the last 10 days," said Levy.

At the same time, the market has been stymied by uncertainty ahead of the U.S. presidential election and concerns about the economic time bomb known as the fiscal cliff.

But Thursday's economic reports offered a silver lining. The government said first-time claims for unemployment benefits fell more than expected last week, to 369,000. Reports on durable goods and pending home sales in September also came in above expectations.

Investors have also been encouraged by signs of progress in Europe, where officials are expected to push ahead with plans to give Greece more time to meet its budget goals, said David Lutz, head ETF trader at Stifel Nicolaus in St. Louis.

"Some of the stress is coming off in the eurozone," said Lutz, adding that stocks are also benefiting from a rotation of money out of U.S. Treasuries.

Currencies and commodities: The dollar fell against the euro and the British pound, but gained against the Japanese yen.

Oil for December delivery rose 32 cents to settle at $86.05 a barrel.

Gold futures for December delivery rose $11.40 to settle at $1,713 an ounce.

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