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Stocks rise slightly with Fed, retail in focus


NEW YORK >> The stock market edged higher Friday after two days of big declines.

The Standard & Poor's 500 index edged up less than a point, or 0.04 percent, to 1,662. The Dow Jones industrial average rose 22 points, or 0.2 percent, to 15,134. The Nasdaq composite index gained 12 points, or 0.3 percent, to 3,618.

Concerns about retail stores and a pullback in the Federal Reserve's stimulus program have roiled markets this week.

Investors have focused on retail stores like Nordstrom Inc., which cut its full-year sales outlook late Thursday. The bleaker outlook from the high-end store follows grim forecasts from Wal-Mart Stores and Macy's Inc.. Nordstrom shares fell $1.80, or 3 percent, to $57.53 early Friday.

The retail sector is a closely-watched part of the U.S. economy as consumer spending makes up roughly 70 percent of economic activity.

Investors have also been concerned about what will happen to the stock market -- and the U.S. economy -- once the Federal Reserve begins winding down its massive bond-buying program as early as next month. Some investors think that the Fed's program has been a large contributor to the stock market's record run.

"The big question is will the Fed eliminate the bond-buying program in September and, if so, how they will they remove the bond buying," said Frank Davis, director of sales and trading for LEK Securities.

Investors moved into the traditional "flight to safety" assets such as gold, which was up $3.80, or 0.3 percent to $1,364 an ounce on Friday.

The Dow has dropped nearly 300 points, or roughly 2 percent, this week alone. The S&P 500, which is a broader gauge of the market, is down almost 30 points, or 1.8 percent. for the week. The market is on pace for its third-worst week this year.

Also in focus for Friday were the homebuilders, following a Commerce Department report that new home construction was up 6 percent in July to a seasonally-adjusted rate of 896,000. That figure was below economists' consensus forecast of 903,000, however.

Housing has been one of the bright spots of the U.S. economy for the last several months. In June, home builders sought the most building permits for single-family homes in five years. New-home sales jumped in June to their highest level in five years as well.

Shares of PulteGroup Inc., Lennar Corp. and D.R. Horton Inc. were all up more than 2.5 percent in early trading - making homebuilders the best performing sector in the S&P.

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HD36 wrote:
China and Japan, the two largest creditors of the US, sold more than $45 billion of US Treasury Bonds in June. Even if the Fed doesn't taper, which many people think, buying more bonds only devalues the currency further. All this cheap money has done is fuel speculation in the stock and real estate market. Gold is going up as a hedge against further QE and because the physical gold has been rehypothicated to the point where the comex could be forced to shut down, and the short sellers are covering. In the shadowy world of $600 trillion derivitives interwoven between international banks, wealth is an illusion.
on August 16,2013 | 07:46AM
Upperkula wrote:
My thoughs exactly!
on August 16,2013 | 08:00AM
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