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Stock markets close little changed after dramatic day

August 1, 2011 |  1:32 pm

Exchange flag  stan honda getty U.S. stock markets closed for the day relatively unchanged after a day of dramatic swings that ended with tempered optimism about an impending deal on the debt ceiling.

The Dow Jones industrial average finished down 10.75 points, or 0.1%, at 12,132.49.

When the markets opened in the morning investors were buoyed by the announcement of the debt deal Sunday night, sending the Dow up as much as 140 points.

The rally was quickly squelched when the Institute for Supply Management announced that its widely watched index of factory activity fell to 50.9, down from 55.3 a month ago. Manufacturing has been a central part of the recent economic recovery, and the slowdown in manufacturing -- almost to the point of contraction -- is seen as a worrying sign that U.S. economic activity is slowing down.

At midday the Dow fell as much as 140 points.

Late in the day, though, attention turned again to the debt-ceiling agreement after Democratic and Republican leaders said that they were hopeful the deal would be voted on and approved Monday night. That sent indexes into positive territory briefly before the close.

In the end, all the major indexes closed down slightly. It was the sixth straight day of losses. The Standard & Poor's 500 index closed down 5.34 points, or 0.4%, at 1286.94.


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Photo credit: Getty Images/Stan Honda.