The US central bank, the Federal Reserve, next debates whether to increase interest rates on 22 August.
At the close on Wednesday, the Dow Jones Industrial Average was 80.58 higher at 10,687.53, having at one stage been up more than 100 points.
Fast growth
New York economist Ken Goldstein said: "The leading indicators are cooling off from the rapid pace registered at the end of last year.
"This is not the kind of performance to be expected when gross domestic product grows by 5.2%, as it did in the second quarter of 2000.
"Some unusual influences are having an impact... especially the interplay between the bond market and the Federal Reserve Board."
The Federal Reserve is known to regard a GDP growth rate of more like 3.5% to 4% to be sustainable, and some economists believe it will raise interest rates further to try to slow the economy down to this rate.
Mixed picture
But the overall economic picture is unclear, with conflicting data emerging.
Consumer confidence and consumption have remained strong, while manufacturing is flat and construction slightly down.
Commerce Department figures were released on Wednesday showing that sales of new homes fell 3.7% in June, to the lowest level since December 1997.
Although new home sales fell, existing home purchases rose in June, hitting their highest level since August 1999.
Nevertheless, Wit Soundview investment banker Adam Weisman said of Wednesday's figures: "The data have really helped improve the market's overall mood, but Friday's data will be the key for the week."
Vital statistics
On Friday, the US government is due to release pay and employment data for July.
If those figures suggest that the economy is slowing, investors are hoping the Federal Reserve will hold off raising interest rates again.
Federal Reserve Governor Laurence Meyer said the economy was capable of growing more rapidly than had been thought to be the case.
He said: "It is capable of growing faster on a sustainable basis than it was, it is capable of operating at higher utilization rates and lower unemployment rates - without higher inflation."