Stocks pare gains after run-up

Stocks pare gains after run-up

	Published : Fri, 30 Nov 2007 21:28 By : Agencies Print this Story

NEW YORK (AP) - Stocks gave up sizable gains Friday to fluctuate in the final hour of trading as Wall Street seemed likely to cap a big week quietly.

The Dow Jones industrial average had risen 150 points earlier in the session after Federal Reserve Chairman Ben Bernanke gave investors more reason to believe further interest rate cuts could be on the way. The tech-dominated Nasdaq composite index was lower after weak quarterly results from Dell Inc.

The market's fizzle Friday was perhaps to be expected following several sessions of sharp gains.

In a speech late Thursday, Bernanke said persistently tight credit conditions, the housing slump and high energy prices will probably create some 'headwinds for the consumer in the months ahead,' and the central bank will have to be 'exceptionally alert and flexible.'

The comments echoed those of Fed Vice Chairman Donald Kohn earlier in the week, which helped Wall Street recover some of its recent steep losses. Investors read Bernanke's words as a sign that the Fed is willing to lower interest rates again after cutting them at the past two meetings.

'Although the U.S. is in the eye of the credit storm, we have seen the Fed cut rates and we have heard from Bernanke that they are prepared to do so again if necessary,' said Robert Jukes, global equity strategist at Collins Stewart in London.

The Fed meets again Dec. 11, and a rate cut could help reinvigorate the slowing economy. Evidence of a more reticent consumer came Thursday in a Commerce Department report that showed consumer spending rising a modest 0.2 percent in October, the slowest pace in four months.

The risk of rising inflation had been keeping the central bank cautious about loosening its policy. But that risk is looking less threatening now, given that oil prices have dipped below $90 a barrel for the first time since October and that the Commerce Department said core personal consumption expenditures have risen 1.9 percent year-over-year. Core PCE is one of the Fed's preferred inflation measures, and anything between 1 and 2 percent is considered a comfortable rate.

In late afternoon trading, the Dow fell 11.87, or 0.09 percent, to 13,299.86.

Broader stock indicators were mixed. The Standard & Poor's 500 index rose 2.91, or 0.20 percent, to 1,472.63, and the Nasdaq composite index fell 22.42, or 0.84 percent, to 2,645.71.

Advancing issues outnumbered decliners by more than 2 to 1 on the New York Stock Exchange, where volume came to 1.15 billion shares.