Wall Street up; S&P on track for best week in 2015

By Abhiram Nandakumar

REUTERS - U.S. stocks eked out small gains on Friday, with the S&P 500 on track for its best week since December, as investors bet the Federal Reserve will keep interest rates at near-zero levels this year.

Minutes of the Fed's September meeting, released on Thursday, indicated further signs of dovishness and concerns among policymakers about a global economic slowdown weighing on the economy, even before weak September jobs data.

"The fact that we had a correction in August gives the market some room to move," said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.

"I think we could see a short drift higher," Frederick said, adding that stocks were likely to inch up slowly but steadily.

The Fed could hike rates as early as this month, New York Fed President William Dudley said in an interview with CNBC. The central bank next meets on Oct. 27-28.

Investor focus will turn to earnings reports to gauge how companies have weathered the turbulence in the past three months, especially in late August, due to worries about slowing growth.

"When management starts talking about what they're doing on addressing the China issue, the stronger dollar, as well share buybacks or dividend increases, that is what's going to dictate market action and people's focus," said Kevin Kelly, CIO of Recon Capital Partners.

At 11:29 a.m. ET, the Dow Jones industrial average was up 39.55 points, or 0.23 percent, at 17,090.3.

The S&P 500 was up 4.2 points, or 0.21 percent, at 2,017.63 and the Nasdaq composite was up 25.42 points, or 0.53 percent, at 4,836.21.

Six of the 10 major S&P sectors were higher. The energy sector's 0.6 percent fall led the decliners, as crude oil prices seesawed with traders closing positions after a recent rally.

The industrial sector was up 0.69 percent, leading the gainers, helped by a rally in airline stocks that was driven by strong forecasts from American Airlines and United Continental.

American Airlines rose 5 percent and United gained 6.4 percent. The Dow Jones U.S. Airlines index was up 3.9 percent, its strongest gain in more than a month.

Alcoa fell nearly 5 percent to $10.44 after it reported disappointing results.

Tesla declined 2.2 percent to $221.62 after Barclays downgraded the stock to "underweight".

Gap fell 6.6 percent to $27.03, and was the biggest decliner on the S&P 500, after reporting weak September same-store sales.

Advancing issues outnumbered decliners on the NYSE by 1,825 to 1,046. On the Nasdaq, 1,599 issues rose and 983.

The S&P 500 index showed 20 new 52-week highs and one new low, while the Nasdaq recorded 59 new highs and 20 new lows.

(Reporting by Abhiram Nandakumar in Bengaluru; Editing by Savio D'Souza)