Stocks dipped a bit Friday, the last trading day of the third quarter, with Wall Street relieved about solid readings on the economy but cautious ahead of October's corporate earnings reports.
The Dow slipped 17.31, or 0.12 percent, to 13,895.63. The blue-chip index ended the third quarter 3.6 percent higher.
The Standard & Poor's 500 index fell 4.63, or 0.30 percent, to 1,526.75, finishing the quarter up 1.6 percent.
The Nasdaq composite index fell 8.09, or 0.30 percent, to 2,701.50, and finished the quarter with a gain of 3.8 percent.
The market's losses were small, thanks to positive reports on consumer spending, construction spending, inflation and Midwest manufacturing. Though strong economic data might lower the chance that the Federal Reserve will further reduce rates, the tame inflation measure kept hopes of a rate cut alive.
Last week the Fed, reacting to August's tightening credit and plunging stocks, helped restore confidence in the financial markets by decreasing the federal funds rate target by a half point to 4.75 percent. The central bank's rate decrease, the first in four years, helped the major stock indexes finish in positive territory for the quarter.
"A second Fed cut will go a long way in reassuring the stock market that the worst is over. The focus going forward will be whether the Fed is going to lower rates to shore this up, or decide the risk of inflation is too high," said Janna Sampson, director of portfolio management at Oakbrook Investments.
Though energy and food prices are surging, core inflation has been within the Fed's comfort zone of 1 percent to 2 percent. The Commerce Department's consumer spending report showed that a key core inflation gauge logged a year-over-year rise in August of 1.8 percent -- the smallest increase since a similar rise in February 2004.
But continuing to weigh on Wall Street is the concern that corporate profits dropped off in the third quarter. Friday is the last trading day of one of the most volatile periods in years, one that pulled stocks sharply lower after the Dow Jones industrial average closed at a record 14,000.41 in mid-July. Wall Street now is bracing for signs, ahead of the mid-October onslaught of earnings reports, of how companies fared during the summer's tumult.