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Wednesday, September 19, 2012

US Stocks close flat as Apple, Fed set the floor (ext.CNN)

NEW YORK (CNNMoney) -- The Fed and Apple kept the stock market from pulling back too sharply this week.

The Dow Jones industrial average, the S&P 500, and the Nasdaq closed nearly flat, despite more signs of a global economic slowdown and new issues related to Europe's debt crisis.

The tendency of central banks to do whatever it takes to help the economy is very much in the minds of investors, after the Federal Reserve announced it would buy more mortgage-backed securities to stimulate the economy.

"You can't fight the Fed," said Paul Powers, head of equity trading at Raymond James. "Central banks will keep trying to prop up the market, so investors don't want to sell out."

But uncertainty in Europe abounds, particularly over whether Spain will request a bailout, or even qualify for one. Spain's troubles dampened any enthusiasm investors had over the ECB's recent announcement that it would be willing to buy sovereign debt.

Europe's economy may become increasingly fragmented though. Germans appear to be more optimistic than expected in the face of the continent's issues, according to a report on German investor confidence released Tuesday. Nonetheless, Carsten Brzeski, an economist with ING Bank in London, wrote in a note to clients that the Germany economy may finally be approaching a soft landing.

Oil prices fell for the second day in a row, after plunging more than $3 in less than a minute during Monday's trading session. The U.S. Commodities Futures Trading Commission is reportedly investigating the cause, which left many traders scratching their heads. U.S. crude prices slid another $1.33, or 1.4%, to close at $95.29 a barrel.

The euro lost ground against the U.S. dollar, but, at $1.30, still remains at a five-month high. European stocks closed down between 0.4% and 1.2%.

Another signal on the state of the economy was the Commerce Department's second-quarter data on the nation's current trade deficit, which fell from $133 billion to $117 billion. That was followed by a Treasury Department report that showed foreign investors bought $73.7 billion of U.S. securities in July.

A monthly report on builder confidence from the National Association of Home Builders came in higher than expected at 40, up from 37 last month.

Currencies and commodities: The dollar strengthened against the British pound, but weakened against the Japanese yen.

Gold futures for December delivery closed 60 cents higher at $1,71.20 an ounce.

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