Stocks edged up slightly on Friday as expectations of an interest rate cut off-set concerns of a weakening U.S. housing market.
The anticipated move by the fed help shift concerns away from Merrill Lynch & Co's announcement early Friday, stating that it adjusted the value of securities linked to subprime mortgages. The move may affect it's third-quarter profits, the largest mortgage broker said.
Indexes ended higher for the week, however, with the Federal Reserve widely expected to cut interest rates at its policy meeting on Tuesday. The Dow posting its best week since April 22.
The Dow Jones industrial average was up 17.64 points, or 0.13 percent, at 13,442.52. The Standard & Poor's 500 Index was up 0.30 points, or 0.02 percent, at 1,484.25. The Nasdaq Composite Index was up 1.12 points, or 0.04 percent, at 2,602.18.
Stocks took a hit early Friday after the Commerce Department reported that retail sales fell 0.4 percent in August excluding vehicle sales. Though Autos make up nearly 25 percent of retail sales, they are usually not included due to its month-to-month volatility.
Over all, including autos, retail sales increased 0.3 percent last month.
Investors have been on edge over whether tightness in the credit market, a housing slump and volatility on Wall Street have dented consumer spending, which accounts for more than two-thirds of economic activity.
In technology, Intel Corp. declined 1.7 percent to $24.93, weighing on both the S&P 500 and Nasdaq, after Merrill Lynch downgraded the maker of Pentium processors, and other chips. The Philadelphia Stock Exchange index of semiconductors was down 0.2 percent.
Rising stocks were outnumbering falling ones by a ratio of about 17 to 14 on the NYSE and by 16 to 13 on Nasdaq.