* S&P on track to end quarter with gain of nearly 6 percent
* Chicago PMI weaker than expected
* U.S. shares of RIM rally on results, Nike drops
* Consumer spending rises in August on gas prices
* Dow off 0.3 pct, S&P off 0.3 pct, Nasdaq off 0.4 pct
By Edward Krudy
NEW YORK, Sept 28 (Reuters) - Wall Street was set to finish
its best third quarter since 2010 after a wave of central bank
actions sparked a dramatic reversal in equity markets, but signs
of weakness in the economy on Friday pushed stocks lower and
raised questions about the rally.
The S&P 500 advanced 5.9 percent over the past three months
were mainly due to expectations central banks would boost their
economies. That brings the benchmark index's yearly advance to
But on Friday investors grappled with disappointing U.S.
economic data. The Institute for Supply Management-Chicago's
index of Midwest business activity showed contraction for the
first time since 2009, falling to 49.7 in September from 53.0 in
The data follows other weak regional manufacturing reports
and a sharp drop in durable goods orders last month.
"The reality is that the fundamentals of the market
certainly don't support a 17-plus percent run up year-to-date,
but with all the QE (quantitative easing) action, that has had a
huge, huge impact," said Oliver Pursche, president at Gary
Goldberg Financial Services in Suffern, New York.
The Dow Jones industrial average dropped 33.98
points, or 0.25 percent, to 13,451.99. The Standard & Poor's 500
Index fell 4.07 points, or 0.28 percent, to 1,443.08. The
Nasdaq Composite Index lost 13.00 points, or 0.41
percent, to 3,123.60.
However, stocks were off their lows of the day after Spanish
bank stress tests were mostly within expectations. The
independent audit showed banks will need 59.3 billion euros
($76.3 billion) in extra capital to ride out a serious
Meanwhile, Moody's review of Spain's credit rating, due
later in the day, could add to its challenges.
The final reading on the Thomson Reuters/University of
Michigan survey on consumer sentiment was also less than
expected, though it advanced to its highest in four months.
U.S. consumer spending rose in August by the most in six
months as households stretched to pay for higher gasoline
prices, according to a Commerce Department report.
Recent protests in Greece and Spain against austerity plans
have also heightened investors' concerns as the turmoil could
impede political maneuvering.
Trading was light on the quarter's last day when money
managers reposition their portfolios.
Reflecting the defensive tone, nine of the 10 S&P sectors
fell. Only the S&P utilities index was positive, up just
The decline in the S&P technology sector index was
limited, as Accenture PLC climbed 7.6 percent to $70.39.
Accenture's gain followed its forecast of full-year earnings
higher than analysts' estimates as the company bolsters its
Elsewhere in the tech arena, U.S.-listed shares of Research
in Motion jumped 6.3 percent to $7.60 a day
after a smaller-than-expected quarterly loss.
Nike Inc warned of slowing orders in China, becoming
the latest company to sound a note of caution about how economic
weakness in the world's second-largest economy was affecting its
business. Nike's stock fell 0.5 percent to $95.55.
The S&P 500 is down 1.2 percent this week so far, putting
the index on track for its second consecutive weekly decline and
worst weekly percentage drop since early June as markets have
struggled to maintain upward movement after the Fed's latest
stimulus plan announced on Sept. 13.