After a solid week, stocks flat Friday ahead of Fed
NEW YORK -- Stocks finished a strong week little changed Friday after investors looked past weaker-than-expected economic readings and focused on the Federal Reserve's decision on interest rates next week.
Stocks initially fell sharply Friday after a government report that August retail sales excluding automobiles declined precipitously. The report suggested consumers held off spending in the face of turmoil in the financial markets, an unwelcome development that some on Wall Street are hoping could be reversed by a rate cut. Some investors regarded the readings as supporting the case for a rate cut when Fed policymakers meet Tuesday.
"Emotions are running fairly high," said Robert Schaeffer, vice president at Becker Capital Management in Portland, Ore. "I think you're seeing a lot of normal gyrations in anticipation of whatever the Fed does. They're looking at the economic data and trying to cypher out of that how that's going to impact the Fed's decision next week," he said of investors.
Friday's session began with unease over the Bank of England's decision to grant emergency funding to lender Northern Rock, which was facing a possible liquidity crisis. The need for the bailout unearthed fresh concerns about the fallout from tightness in the credit markets.
Investors eventually set aside some of their concerns and the Dow Jones industrial average finished up 17.64, or 0.1%, at 13,442.52 after being down as much as 100 points early in the session. The advance gave the blue chip index a gain of 2.5% for the week — the Dow's biggest weekly point gain since April.
Broader stock indicators likewise showed modest gains Friday but managed their biggest weekly gains since mid-August. The Standard & Poor's 500 index rose 0.30, or 0.02%, to 1484.25, and the Nasdaq composite index edged up 1.12, or 0.04%, to 2602.18.
For the week, the S&P rose 2.2%, while the Nasdaq added 1.4%.
Government bond prices finished almost unchanged Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.46% from 4.49% late Thursday.
