Stocks retreat from fresh highs on Wall Street

The Dow and S&P 500 have slipped lower today, as investors take a breather following yesterday’s Fed-driven rally.

US shares have lacked clear direction today, with the Dow and S&P 500 drifting down, but with the NASDAQ advancing thanks to the strength of technology stocks.

By early afternoon in New York, the Dow was down 0.26% at 15,636 and the S&P 500 slipped 0.24% to 1721.4. The NASDAQ 100 gained 0.18%.

The Fed yesterday decided yesterday to maintain its stimulus by purchasing $85 billion of securities each month, saying that its wants more evidence that economic progress will be sustained. Coincidentally a handful of up-beat economic reports were released today that suggest the long-promised upturn in second-half growth may be on its way.

The number of individuals claiming benefits for first-time unemployment rose to 309,000 last week. Jobless data is probably still clouded by the unprocessed claims from Nevada and California last week, although the previous week’s figure was upwardly-revised by just 2000.

The US Labor Department says there is still a backlog of uncounted claims to work through, so we can expecte some future revision. Still, the four-week moving average has sunk to 314,750, a post-recession low.

The Philly Fed survey indicates that business activity in the manufacturing sector is picking up pace, with the index spiking up to 22.3 from July’s level of 9.3. New orders have jumped, inventories are dropping and delivery times are slowing, which suggests the momentum could be carried into next month as firms busy themselves with production to keep up.

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