Despite an afternoon sell-off, the stock market today managed to hold on to most of the gains it scored the day before as investors interpreted a pair of weak economic reports as hints that the Federal Reserve will be able to raise interest rates slowly.

The Commerce Department reported that orders for big ticket items -- the technical jargon is "durable goods" -- fell 1.6 percent in May for the second straight month. Cars, computers and machinery accounted for the slowdown.

And the lines at the unemployment office got longer. The weekly count of new applications for jobless benefits grew by 13,000 to 349,000 while the total number of people drawing benefits increased by 75,000 to almost 3 million.

The job figures may be politically bad for President Bush, but they are potentially positive for the stock market -- as is the durable goods order report. Traders believe the softness in the economy will ease the pressure for higher rates, which is the issue dominating Wall Street these days.

The Fed meets next Tuesday and Wednesday, when it will announce its decision, widely expected to be boosting rates by a quarter of a percentage point.

Until then, the market is generally expected to continue to tread water, which is what it did today. There is little that is likely to happen that would push stock prices. The market is viewed vulnerable to downside risks, but today there was no obvious reaction to one of the deadliest days in Iraq in months, with at least 85 people killed.

The Dow Jones industrial average, which had gained 85 points on Wednesday, fell 36 to 10,443.81.

Giving back similar portions of the previous day's advance, the Standard & Poor's 500 stock index fell 3 points to 1,140.65 and the Nasdaq Stock Market composite index slipped 5 to 2,015.57.

Although higher interest rates worry Wall Street, they so far have not hurt the interest-sensitive housing market and instead actually are helping.

May new home sales jumped by almost 15 percent, the biggest monthly move in more than 11 years, the Commerce Department reported.

Housing economics use metaphors like "fence sitter phenomenon" and "don't miss the train" to describe what is happening. Potential home buyers who have been sitting on the fence are now rushing to catch the low-rate mortgage train before it is too late.

Rushing may not be necessary because despite the consensus that the Fed will hike rates, mortgage loan rates slipped this week. Freddie Mac reported the nationwide average for 30-year mortgages fell to 6.25 percent -- down .07 -- and 15 year mortgages fell to 5.64, down .06. Rates have stayed in the 6.25 to 6.35 percent range for the past six weeks.