A trader work on the floor of the New York Stock Exchange
A trader work on the floor of the New York Stock Exchange, November 29, 2010. REUTERS

Stocks retreated in the final hour of trading after the Federal Reserve left interest rates unchanged at near-zero, maintained its bond-buying program and warned about the slow pace of economic recovery in the U.S. Consequently, stock indices finished with modest gains, well below intra-day highs.
The market had rallied earlier behind a stronger-than-expected retail sales report.

The Dow Jones Industrial Average gained 47.98 points, or 0.42 percent. Earlier in the session, the Dow was up almost 90 points and had reached a two-year high. The S&P 500 Index edged up 1.13 points, or 0.09 percent, to 1241.59. The Nasdaq Composite rose 2.81 points, or 0.11 percent, to 2627.72.

Both the S&P 500 and NASDAQ briefly sunk into the red during the final hour of trading but clawed back with a gain for the day.

The Commerce Department reported this morning that U.S. retail sales climbed by 0.8 percent, ahead of expectations of a 0.5 percent increase. Also, November producer price index climbed by 0.8 percent -- above than the 0.5 percent gain expected. Core PPI, which excludes the volatile food and energy sector, rose by 0.3 percent.

In addition, the Commerce Department indicated that business inventories gained by 0.7 percent in October, following a 0.9 percent increase in the previous month.

Best Buy (NYSE: BBY) plunged 14.82 percent after the company reduced its fiscal year outlook and recorded a 3.3 percent drop in quarterly same-store sales.

Oil and gold futures modestly slipped.

Bonds fell as the 10-Year Treasury yield moved up to 3.46 percent.