* S&P 500 on track for seventh straight month of gains
* Data signals soft U.S. economy but not abrupt slowdown
* Volatile trading continues on profit-taking, buying the
* Dow up 0.04 pct; S&P 500 down 0.1 pct; Nasdaq off 0.01 pct
By Angela Moon
NEW YORK, May 31 U.S. stocks held steady by
midday on Friday in a volatile session with constant
profit-taking and "buying the dip" activities keeping the market
In late morning trade, investors took earlier dips in the
market as buying opportunities, while some economic data pointed
to the likelihood of the U.S. Federal Reserve maintaining its
easy money policy. But by midday, the trading was back into
The S&P 500, on track to close out a seventh straight month
of gains, has climbed 3.6 percent in May and 15.9 percent in
2013 after repeatedly scaling new record highs. Over the past
seven months, the index has appreciated about 17 percent.
Trading has been volatile for most of the week as investors
reacted to small declines in the market by almost immediately
buying more shares. The mood, however, was tempered by concerns
about the Fed easing its monetary policy, which has bolstered
the U.S. economy.
In the latest piece of data that eased some anxiety about
the Fed, consumer spending fell in April for the first time in
almost a year and inflation pressures were subdued, pointing to
a slowdown in economic activity.
Consumer spending, which accounts for about 70 percent of
U.S. economic activity, was held down by weak demand for
utilities and a decrease in receipts at gasoline stations
following a drop in gasoline prices at the pump.
When adjusted for inflation, consumer spending increased
just 0.1 percent in April after rising 0.2 percent in March.
"The data is confirming that the Fed is quite a long way
away from having to raise interest rates to control inflation,"
said Tim Ghriskey, chief investment officer of Solaris Group, in
Bedford Hills, New York.
The Dow Jones industrial average was up 6.13 points,
or 0.04 percent, at 15,330.66. The Standard & Poor's 500 Index
was down 1.90 points, or 0.11 percent, at 1,652.51. The
Nasdaq Composite Index was down 0.50 of a point, or
0.01 percent, at 3,490.80.
Equities initially opened lower as investors took profits
following recent gains, but the market pared those losses after
the Chicago Purchasing Managers Index came in stronger than
expected in May with a reading of 58.7, above forecasts that
called for a reading of 50.
The stock market's advance has come largely on supportive
monetary policies from central banks around the world, which has
helped the markets ignore the Wall Street adage of "sell in May,
go away," which refers to a historical trend of seasonal
weakness that tends to begin in May and continue through the
summer. In May 2012, the S&P 500 fell 6.3 percent.
"We're in a goldilocks environment where the economy is
recovering, but not so much that the Fed will pull the punch
bowl away too quickly," said Kristina Hooper, head of portfolio
strategies at Allianz Global Investors in New York.
Netflix Inc was one of the biggest gainers of the
day, jumping 2.1 percent to $227.37 and supporting the Nasdaq.
The Thomson Reuters/University of Michigan final reading on
consumer sentiment for May was 84.5 - the highest level since
July 2007 - and above expectations for a reading of 83.7.
Trading may be volatile near the market's close because the
MSCI indexes are slated to rebalance at the end of the day.
Credit Suisse forecast $19 billion in total trading as a result
of the rebalancing, with $15 billion related to developed
In company news, Palo Alto Networks shares lost 9.9
percent to $49 after the company gave an outlook that was below
The Food and Drug Administration denied approval late
Thursday to Endo Health Solutions Inc's injectable
testosterone drug, asking for a better risk-management plan.
Endo's stock, however, rose 1.9 percent to $36.62 in trading at
midday on Friday.
One of the biggest minority shareholders in Clearwire Corp
on Thursday urged the wireless company to recommend
rejection of Sprint Nextel Corp's buyout offer after Dish
Network Corp made a counter bid.
Clearwire shares fell 0.9 percent to $4.46. Sprint shed 0.4
percent to $7.31.