US stocks slipped on Friday after comments from an influential member of the US Federal Reserve appeared to suggest an interest rate hike next month remained a possibility. Fed Vice Chairman Stanley Fischer said the United States was heading in the direction of higher rates and that recent economic data had been impressive. Stocks were mixed before Fischer's comments on CNBC, with investors wary of taking big positions into the weekend after days of tumultuous trading.
Even so, the three major US indexes looked set to end the week higher after a brutal selloff early in the week sparked by worries about the health of the Chinese economy. "A lot of investors are rebalancing their portfolios before going into the weekend and the dips that we saw earlier in the week were good buy opportunities," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin. The recent market turmoil, that saw the Dow lose more than 1,000 points in intraday trading on Monday, has led to strategists cutting their end-of-year forecasts for indexes. Data for August 20-26 showed a record $28 billion in outflows from equity funds.
The index - popularly known as the "fear index" - was up 2 percent at 26.67. It soared to a more than 6-year-high earlier in the week. At 12:03 ET (1603 GMT) the Dow Jones industrial average was down 69.02 points, or 0.41 percent, at 16,585.75, the S&P 500 was down 5.44 points, or 0.27 percent, at 1,982.22 and the Nasdaq Composite was down 9.55 points, or 0.2 percent, at 4,803.16. Six of the 10 major sectors were lower, with the utilities index's 0.8 percent fall leading the decliners. The energy index jumped 2 percent a day after oil prices jumped the most in a day since 2009.
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