S&P 500 edges up to set new record; best month since Feb
US stocks closed out a strong month on a quiet note, with the S&P 500 posting a modest gain to close at a new record as the latest positive data helped extend a rally that had been briefly threatened by overseas concerns.
Since falling to a near three-month low on Aug. 7, the S&P 500 has risen in 12 of the past 16 sessions. It is also closed out its fourth straight weekly advance and sixth positive month of the past seven. Friday's gains pushed the index to its latest record close of 2,003.37, its third finish above 2,000 this week.
Wall Street initially lost ground after Britain introduced a note of caution into the market, raising its international terrorism threat level to the second highest in response to possible attacks being planned in Syria and Iraq.
In the latest economic data, business activity in the US Midwest rebounded more than expected in August, signaling a pickup in that region's economy. Separately, US consumer sentiment rose more than expected, according to the final August reading from the Thomson Reuters/University of Michigan Surveys of Consumers.
The Dow Jones Industrial average rose 18.88 points, or 0.11 percent, to 17,098.45, the S&P 500 gained 6.63 points, or 0.33 percent, to 2,003.37 and the Nasdaq Composite added 22.58 points, or 0.5 percent, to 4,580.27.
For the week, the Dow rose 0.6 percent, the S&P advanced 0.7 percent and the Nasdaq was up 0.9 percent, the fourth consecutive week of gains for all three. For the month of August, the Dow added 3.2 percent, the S&P gained 3.8 percent and the Nasdaq finished 4.8 percent higher. The S&P's gain marked its best monthly performance since February.
The week's trading volume has been among the lightest of the year, with action muted going into the Labor Day holiday in the United States. Markets will be closed on Monday.
Volume was thin, with about 3.8 billion shares traded on US exchanges, well below the 5.29 billion average so far this month, according to data from BATS Global Markets.
Advancing stocks outnumbered declining ones on the NYSE by 2,117 to 890, while on the Nasdaq, advances beat declines 1,882 to 790.
European shares eked out small gains in thin, choppy trade, helping one key euro zone index of blue chips record its biggest monthly rise since February.
Most European bourses closed off their morning highs, however, after euro zone inflation data slightly cooled market speculation about fresh monetary stimulus by the European Central bank, a key driver behind the market bounce over the past three weeks.
Euro zone inflation dropped as expected to a fresh five-year low in August, data showed today, but it was not likely to force the ECB into immediate policy intervention next week.
Dovish comments by ECB President Mario Draghi last week had fuelled market bets that the central bank was preparing to pump more into the system, possibly via purchases of government or corporate bonds, a measure known as quantitative easing (QE).
The FTSEurofirst 300 index of top European shares closed 0.3 percent higher at 1,373.82 points, having traded as high as 1,376.58 points before the euro zone inflation data.
The euro zone blue-chip Euro STOXX 50 also rose 0.3 percent, helping it to a third straight weekly rise and leaving it up 1.8 percent for August, its biggest monthly gain since February.
Price action was volatile and volume on the index was 25 percent lower than its average for the past three months.