Stocks post modest gains even after report showing slower economic growth

Stocks rise modestly after GDP revision

NEW YORK — Stocks edged higher early Tuesday as investors shrugged off a report showing third-quarter economic growth was not as strong as previously forecast.

The Commerce Department’s new reading on gross domestic product showed a growth rate of 2.2 percent, lower than a previous estimate of 2.8 percent. The government cut the reading because consumers didn’t spend as much, commercial construction weakened and companies reduced inventories.

But the economy still grew during the quarter after a record four straight quarters of decline. Many analysts believe the economy is on track for a better finish in the current quarter.

Traders also awaited a report that is expected to show sales of existing homes rose to their highest level in nearly three years. Economists predict home sales rose 2.5 percent to a seasonally adjusted annual rate of 6.25 million in November, from 6.1 million in October.

A sharp decline in sales and home prices coupled with rising defaults helped push the nation into recession. Any signs of improvement in the market would further boost confidence in the speed of the recovery.

The National Association of Realtors’ report is scheduled to be released at 10 a.m. EST.

Shortly after the market opened, the Dow Jones industrial average rose 40.28, or 0.4 percent, to 10,454.42. The Standard & Poor’s 500 index rose 4.21, or 0.4 percent, to 1,118.26, while the Nasdaq composite index rose 9.85, or 0.4 percent, to 2,247.51.