1st LD Writethru: U.S. stocks tick up ahead of Fed policy meeting

U.S. stocks pared early losses to end higher Friday, as investors pondered over economic reports ahead of the U.S. Federal Reserve's key policy meeting next week.

The Dow Jones Industrial Average rose 102.69 points, or 0.63 percent, to 16,433.09. The S&P 500 added 8.76 points, or 0.45 percent, to 1,961.05. The Nasdaq Composite Index was up 26.09 points, or 0.54 percent, to 4,822.34.

The seasonally adjusted U.S. Producer Price Index (PPI) for final demand was unchanged in August, the Labor Department said Friday.

In August, a 0.4-percent increase in the index for final demand services offset a 0.6-percent decrease in prices for final demand goods.

Meanwhile, the preliminary reading of Thomson Reuters/ University of Michigan's consumer sentiment index came in at 85.7 for September, well below market estimates of 91.

"The global slump in commodity prices continues to reverberate through inflation reports. Prices where they stand (or lower) will give the doves on the Fed board plenty of ammunition to argue for a very gradual approach to tightening rates, if a tightening is necessary at all," said Jay Morelock, an economist at FTN Financial, in a note.

Wall Street remains focused on the Fed ahead of its policy meeting on Sept. 16-17, when the U.S. central bank could raise interest rates for the first time in more than nine years.

Analysts said uncertainty about the Fed's decision on rate hikes at its two-day meeting next week has contributed to the recent market volatility.

For the holiday-shortened week, both the blue-chip Dow and the broader S&P 500 gained 2.1 percent, while the tech-heavy Nasdaq jumped 3.0 percent. Endit