By Rodrigo Campos
NEW YORK (Reuters) - U.S. stocks edged higher on Friday, with the S&P 500 set to post its largest weekly gain in two months, with traders focusing on next week's U.S. Federal Reserve meeting and its expected reduction of stimulus.
Despite indications economic growth slowed somewhat in the third quarter, the Fed is seen trimming its monthly asset purchases by $10 billion to $75 billion, with monetary policy remaining widely accommodative - and supportive of equities.
Retail sales rose for a fifth consecutive month in August, though the increase was smaller than the market expected. U.S consumer confidence slipped early this month and inflation pressures remained subdued even after an energy-led increase in wholesale prices last month.
The S&P is nearing resistance at 1,700 and will remain range-bound until the Fed meeting, ongoing U.S.-Russia talks on Syria and a looming fiscal crisis in Washington are resolved, said Jim Paulsen, chief investment officer at Wells Capital Management in Minneapolis.
He said "the data coming out is too good to allow (the market) to fall very far," but there is little clarity to help push it much higher.
Trading will be "a little choppy between now and when all this issues are resolved," he said.
The Dow Jones industrial average <.DJI> rose 66.66 points or 0.44 percent, to 15,367.3, the S&P 500 <.SPX> gained 3.99 points or 0.24 percent to 1,687.41, and the Nasdaq Composite <.IXIC> dropped 0.078 points or 0 percent to 3,715.889.
The S&P 500 <.SPX> is up nearly 2 percent for the week, its largest gain since mid-July. The Dow's current 3 percent weekly advance is its biggest since the first week of the year.
U.S. crude fell 0.8 percent as concerns about Syria retreated. U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov agreed to push again for an international conference aimed at ending Syria's civil war.
Coal sector shares fell ahead of next week's unveiling of a carbon emissions-rate standard for new fossil fuel power plants. Alpha Natural Resources
(Reporting by Rodrigo Campos; Editing by Nick Zieminski)