NEW YORK (REUTERS) - Wall Street ended a tumultuous week with a flat close on Friday as investors shrugged off concerns that a September rate rise was more likely than some investors expected.
Shares traded lower earlier in the session after Fed vice-chairman Stanley Fischer told CNBC the Fed had not yet decided whether to raise interest rates in September.
However, the market largely recovered in the final moments of trade.
After several volatile sessions that at one point pushed the S&P 500 to its lowest level since October 2014, the three major US indices ended the week with gains.
"A lot of investors are rebalancing their portfolios before going into the weekend," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin.
Many on Wall Street have been hoping the recent global market turbulence and worries about China's economy would lead the Fed to hold off raising rates.
This expectation was reinforced on Wednesday by comments from New York Fed president William Dudley.
However, following Fischer's comments on Friday, overnight indexed swap rates implied traders now see a 35 per cent chance the Fed would raise rates in September, up from 22 per cent earlier in the week.
The Dow Jones industrial average ended down 0.07 per cent at 16,643.01 while the S&P 500 edged up 0.06 per cent to 1,988.87.
The Nasdaq Composite added 0.32 per cent to end at 4,828.33, driven by a 2.52 per cent rise in Intel Corp.
For the week, the Dow gained 1.1 per cent, the S&P rose 0.9 per cent and the Nasdaq added 2.6 per cent.
The S&P remains down more than 5 per cent from when the market began to sell off on Aug 18.
The turmoil has prompted several strategists to cut their end-of-year forecasts for indexes.
Credit Suisse, for example, cut its year-end target for the S&P 500 to 2,100 from 2,200 on Friday.
Half of the 10 major sectors rose, with the energy index jumping 2 per cent as oil added to gains.
The utilities index lost 0.42 per cent. Chevron's 3.6 per cent gain provided the biggest boost to the Dow and the S&P 500.
Data released on Friday showed US consumer spending picked up a bit in July, further evidence of strength in the economy.
Autodesk dropped 4.96 per cent after the maker of computer-aided design software cut its full-year profit and revenue forecast.
Big Lots was jumped 15.67 per cent after its second-quarter profit beat expectations and the company raised its full-year adjusted profit forecast.
While the Dow and S&P were negative, advancing issues outnumbered decliners on the NYSE by 1,917 to 1,114.
On the Nasdaq, 1,882 issues rose and 877 fell.
The S&P 500 index showed one new 52-week high and one new low, while the Nasdaq recorded 21 new highs and 22 new lows.
Volume was lighter than in recent days. About 7.8 billion shares traded on US exchanges, compared to an average of 11.2 billion in the past five sessions, according to BATS Global Markets.