Wall Street drifts higher with eyes on Fed

NDTV Profit Desk

13 Sep 2013, 11:50 PM IST

US stocks edged higher on Friday, with the S&P 500 set to post its largest weekly gain in two months, with traders focusing on next week's US Federal Reserve meeting and its expected reduction of stimulus.

Despite indications economic growth slowed somewhat in the third quarter, the Fed is seen trimming its monthly asset purchases by $10 billion to $75 billion, with monetary policy remaining widely accommodative - and supportive of equities.

Retail sales rose for a fifth consecutive month in August, though the increase was smaller than the market expected. US consumer confidence slipped early this month and inflation pressures remained subdued even after an energy-led increase in wholesale prices last month.

The S&P is nearing resistance at 1,700 and will remain range-bound until the Fed meeting, ongoing US-Russia talks on Syria and a looming fiscal crisis in Washington are resolved, said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.

He said "the data coming out is too good to allow (the market) to fall very far" but there is little clarity to help push it much higher.

Trading will be "a little choppy between now and when all this issues are resolved," he said.

The Dow Jones industrial average rose 66.66 points or 0.44 per cent, to 15,367.3.

The S&P 500 gained 3.99 points or 0.24 per cent to 1,687.41.

The Nasdaq Composite dropped 0.078 points or 0 per cent to 3,715.889.

The S&P 500 is up nearly 2 per cent for the week, its largest gain since the middle of July. The Dow's current 3 per cent weekly advance is its biggest since the first week of the year.

US crude fell 0.8 per cent as concerns about Syria retreated. US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov agreed to push again for an international conference aimed at ending Syria's civil war.

Coal sector shares fell ahead of next week's unveiling of a carbon emissions-rate standard for new fossil fuel power plants. Alpha Natural Resources dropped 3 per cent to $6.17, Peabody Energy lost 2.7 per cent to $18.06 and Arch Coal fell 2.5 per cent to $4.73.

Intel Corp shares gained 3 per cent to $23.30 to rank among the largest contributors to the S&P 500 after Jefferies boosted its rating on the chipmaker to 'buy' from 'hold' and upped its price target to $30 per share.