Wall Street started out today betting that an interest rate cut by the Federal Reserve would make up for the growing weakness in the U.S. economy shown in the latest Commerce Department report on factory orders.

But the harder investors looked at the economy, the more dubious they became about that idea.

After hitting their highest levels in two months at mid-day, the major stock indexes began a steady retreat that left the markes with only modest gains for the day.

By the closing bell, the Dow Jones Industrial Average, which had been ahead by more than 200 points earlier, was up only 54 points, closing at 8,571.60.

Retreating in lockstep with the Dow, the Nasdaq Stock Market composite index ended the day up 36 points at 1,396.54 and the Standard & Poors 500 stock index closed ahead by 7 at 908.35.

The morning leap was a bit of a surprise, because analysts had been expecting the markets to got into a holding pattern today and tomorrow, awaiting the outcome of Tuesday's elections and Wednesday's Fed meeting.

In the end that proved to be the case.

The 200-point jump by the Dow was particularly puzzling because the factory orders data was particularly weak. Falling for the second month in a row and the third in the last four, orders for manufactured goods were down 2.3 percent in September.

Factory employment is also falling, another report showed, with 2 million jobs losts in the last two years.

Wall Street still seems convinced that Alan Greenspan will be able to turn the economy around by cutting rates on Wednesday, but by the end of the day that confidence seemed a little shakier than it had in the morning.