Dow edges up, breaking 8-day string of losses

NEW YORK - Stock indexes came back from deep morning losses and ended Wednesday with small gains. The Dow Jones industrial average avoided a ninth straight daily decline to avoid its longest losing streak since Jimmy Carter was president.

The Dow rose nearly 30 points - after being down 166 - to break its eight-day losing streak. Nine days would have been the longest since February 1978. The S&P 500 index rose 6 points and broke a seven-day losing streak.

Markets have fallen recently because investors are becoming increasingly worried about the U.S. economy.

Shortly after the market opened, the Institute of Supply Management said its index measuring the service sector of the U.S. economy grew in July at the weakest pace in 17 months. Economists expected a slight rise.

The report was the latest sign over the last week that the economy may be slowing.

Consumers cut their spending in June for the first time in nearly two years; manufacturing slowed, and the government said that in the first half of the year the economy grew at its slowest pace since the recession ended in June 2009.

"There has been too much at the same time for investors to hang in there, and you're starting to see some element of panic finally showing up," said Andrew Goldberg, U.S. market strategist at JP Morgan Funds.

The Dow Jones industrial average finished with a gain of 29.82, or 0.25 percent, to 11,896.44. The S&P 500 index rose 6.29, or 0.50 percent, to 1,260.34.

The Nasdaq composite added 23.83, or 0.89 percent, to 2,693.07.

The S&P 500 index - the broad index followed by most professional money managers and U.S. mutual funds - rose after it hit a low for the year Wednesday of 1,234. Some investors saw it as an opportunity to buy the S&P 500 index. As a whole, companies in the index are expected to have record profits this year.

Some of those gains might also be due to automatic buying triggered when an index reaches a certain level. Many traders use computer programs that buy or sell stocks once they break through their long-term averages.

Mark Lamkin of Lamkin Wealth Management in Louisville, Ky., said the stock market was in a "tug-of-war" between strong corporate earnings and a "horrible economic backdrop."

Coca-Cola led the Dow average higher with a gain of nearly 2 percent. Companies that depend most on an expanding economy to make profits had the steepest losses. Caterpillar Inc. fell 0.9 percent, the most of the 30 stocks in the Dow average.