NEW YORK (REUTERS) - United States (US) stocks rose on Friday and the Dow registered its best weekly gain since January, helped by gains in Intel, though trading was subdued as the Federal Reserve is expected to scale back its stimulus measures next week.
Despite indications economic growth slowed somewhat in the third quarter, traders expect the Fed to trim its US$85 billion (S$108 billion) in monthly bond purchases by US$10 billion while leaving interest-rate policy highly accommodative to help the economy - and be supportive of equities.
The Dow, up 3 per cent for the week, has one more week of trading with its current 30 constituents. After that, the average will add Goldman Sachs, Nike and Visa , replacing Alcoa, Bank of America and Hewlett-Packard. Visa rose 7 per cent this week.
Giving all three indexes their biggest lift on Friday was Intel, whose shares gained 3.6 per cent to US$23.44, after Jefferies boosted its rating on the chipmaker and raised its price target to US$30 per share.
The S&P 500 rose 2 per cent for the week, its best gain in about two months, yet its trading range has narrowed sharply this week and that trend is expected to continue until the Fed announcement.
The Nasdaq posted a 1.7 per cent gain for the week.
"Next week, the Fed discussion and tapering, and where they land, is big news for the marketplace and, more importantly, how the market interprets what the Fed is either doing or not doing," said Mr Vernon Meyer, chief investment officer of Hartford Funds in Radnor, Pennsylvania.
The Dow Jones industrial average was up 75.42 points, or 0.49 per cent, at 15,376.06. The Standard & Poor's 500 Index was up 4.57 points, or 0.27 per cent, at 1,687.99. The Nasdaq Composite Index was up 6.22 points, or 0.17 per cent, at 3,722.18.
Coal sector shares fell before next week's unveiling by regulators of a carbon emissions-rate standard for new fossil fuel power plants. Alpha Natural Resources dropped 2.4 per cent to US$6.21, Peabody Energy lost 3.2 per cent to $17.98 and Arch Coal fell 3.3 per cent to US$4.69.
The day's economic data showed 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.