Wall Street was feeling more upbeat today after the government reported gross domestic product (GDP) contracted less than expected in the...

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NEW YORK — Wall Street was feeling more upbeat today after the government reported gross domestic product (GDP) contracted less than expected in the third quarter.

At the close, the Dow was up 189.73, or 2.1 percent, to 9,180.69 after rising 276 points in the early going and briefly trading in negative territory.

Broader stock indicators also rose. The Standard & Poor’s 500 index advanced 24.00, or 2.6 percent, to 954.09, and the Nasdaq composite index rose 41.31, or 2.5 percent, to 1,698.52.

The Commerce Department reported that the nation’s economic output was the weakest since the third quarter of 2001, but it wasn’t as bad a showing as Wall Street had feared. The department said the gross domestic product, the measure of all goods and services produced within the U.S., fell at a 0.3 percent annual rate from July through September, rather than 0.5 percent as expected.

Investors’ cautious optimism and generally calm trading followed a mixed finish Wednesday after the Fed’s decision to lower its fed funds target rate by a half-point to 1 percent. Many investors had hoped the market would build on an 889-point surge in the Dow Jones industrial average on Tuesday. But some of the buying momentum reappeared today after the GDP report.

Michael Strauss, chief economist at Commonfund, said Wall Street was relieved that the GDP figures weren’t worse and that, more broadly, investors are drawing some confidence from the government’s array of efforts to revive the credit markets as boding well for a weak economy.

“I think it’s sort of ‘What do you have to do to get someone back from cardiac arrest?’ You have to shock them pretty hard, and sometimes you have to shock them a couple of times. I think that’s what going on here,” he said, referring to steps like the Fed’s rate cuts and government cash injections in banks, which began this week.

Strauss contends the programs, most of which have yet to take effect, are creating some appetite for stocks that have been pounded down this month.

“I think we’re seeing that transition from ‘don’t buy’ to ‘maybe we buy something,’ ” he said.

The back-and-forth moves on Wall Street have been enormous for more than a month as hedge funds, mutual funds and other professional traders shore up their positions and respond to sell orders. The jockeying likely will continue until at least mid-November as some mutual fund investors shift their portfolios ahead of the end of the fiscal year.

On Wednesday, the Dow rose as much as 298 points in the final minutes of the session before ending down 74.16 points, or 0.82 percent. Analysts variously blamed reports, later disputed, of a flat profit forecast at General Electric and investors’ profit-taking. The S&P 500 index fell 1.11 percent, while the Nasdaq composite index rose 0.47 percent.

Investors appeared more hopeful today.

Chris Hensen, senior portfolio manager at MFC Global Investment Management in Toronto, said the GDP numbers raised the possibility that Wall Street has been too dour in its assessment of the economy. But even if the numbers are shown to be weaker in subsequent revisions — as some observers speculated — he said the early read on third-quarter GDP served as a reminder that even in a weak economy companies can remain profitable.

He pointed to CVS Caremark, which today reported that its third-quarter earnings rose 7 percent as its retail pharmacy revenue improved. Shares of the drugstore operator and pharmacy benefits manager rose $2.75, or 10.5 percent, to $29.06.

“There’s some slight incremental surprises out there,” Hensen said. “You get numbers out that aren’t as draconian.”

But investors were still drawn to short-term government debt as some jitters remained. The yield on the three-month Treasury bill, regarded as the safest investment around and an indicator of investor sentiment, fell to 0.44 percent from 0.55 percent Wednesday. A drop in yield indicates an increase in demand. Meanwhile, the yield on the benchmark 10-year Treasury note rose to 3.92 percent from 3.86 percent late Wednesday.

Wall Street remains worried about how much the economy will slow and whether the stock market’s pullback adequately accounts for the decrease in corporate profits likely to come. With its advance this week, the market appears more enthusiastic about the likelihood that the economy will sidestep a protracted recession. Though definitions vary, economists often point to back-to-back quarterly declines in GDP as signifying a recession. Today’s GDP report indicates the economy could be half way to that mark.

Regardless of whether the economy is in a recession, consumers and investors are feeling the pinch. As the end of October nears, the Dow is down 17.1 percent for the month, having fallen in 16 of 21 trading days.

Light, sweet crude fell $1.95 to $65.55 per barrel on the New York Mercantile Exchange.