S&P 500 aims for fifth week of gains

Stocks have eased back from earlier highs ahead of key economic data later this week.

We come into this week off the back of a run of four weekly advances in a row for the S&P 500, and the index began the day off brightly enough, quickly racing up 0.3% earlier in the session.

Some of those gains had been pared back by early afternoon in New York, though, with the S&P up 0.18% at 1764.9, while the Dow slid into negative territory, off 0.03% at 15,610.

The S&P 500 has gained close to 24% this year, on track for its best performance in ten years; much of the rally has been fanned by the loose monetary policy of the Fed.

St Louis Fed President James Bullard defended the Fed’s on-going stimulus in an interview with CNBC today, describing Quantitative Easing as a ‘normal policy when the policy rate is zero’, calling it ‘a very reasonable thing to do’, despite the large magnitude of the Fed’s monthly purchases, which he acknowledged was a ‘torrid pace’, and said he wanted the Fed to meet its goals, namely improvement in the unemployment rate and inflation closer to 2%.

Some key metrics for the US economy will be released later this week: we have the first estimate for Q3 gross domestic product on Thursday, with growth expected to slow to 2.0% from the 2.5% seen in Q2, followed by official government employment data for October on Friday. The unemployment rate is expected to rise to 7.3%.

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