Markets drift after mixed US retail sales data
LONDON- AP

A mixed set of U.S. retail sales data did little to alter the cautious mood in markets Friday as investors geared up for next week’s crucial meeting of the U.S. Federal Reserve. Ongoing uncertainty over Syria also kept a lid on sentiment. Though retail sales in August rose by a monthly 0.2 percent, half the rate anticipated in the markets, the previous month’s gain was doubled to 0.4 percent. Retail sales are considered an important measure by investors as they account for around 70 percent of the U.S. economy. Though the gains are hardly spectacular, analysts said it still remains likely that the Fed will start reducing its stimulus at the end of its two-day policy meeting on Wednesday. Currently, most analysts expect the Fed to begin “tapering” its stimulus by $10 billion a month. The Fed has been buying $85 billion in financial assets every month in an attempt to keep a lid on borrowing rates and boost lending. Most economic indicators have suggested that the U.S. economy, the world’s largest, is healing. “Today’s retail report is unlikely to tell the Federal Reserve anything new regarding the health of the economy,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. “The momentum towards full recovery remains intact and is unlikely to stall the Fed’s desire to scale back its level of bond purchases.” Given that the highly anticipated figures were largely in line with expectations, the reaction among investors was muted and stocks were trading in fairly narrow ranges. In Europe, the FTSE 100 index of leading British shares closed down 0.1 percent at 6,583.80 while Germany’s DAX rose 0.2 percent to 8,509.42. The CAC-40 in France also ended 0.2 percent higher at 4,114.50. In the U.S., the Dow Jones industrial average was up 0.4 percent at 15,368 while the broader S&P 500 index rose 0.3 percent to 1,688. As well as focusing on the future of Fed policy, investors continued to monitor any developments concerning Syria. Russia proposed Monday that Syria avoid a U.S. military strike by surrendering control over its chemical weapons. Damascus quickly jumped at the offer. Top U.S. and Russian diplomats are holding talks in Geneva to discuss the specifics.

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