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US STOCKS-Wall St gains modestly after data; BlackBerry plummets

Chuck Mikolajczak
Monday, 4 Nov 2013 | 10:23 AM ET

* BlackBerry abandons sale plans, to replace CEO

* Weyerhaeuser to sell homebuilding unit for $2.7 bln

* U.S. factory orders fall more than expected

* Indexes: Dow 0.1 pct, S&P 0.1 pct, Nasdaq off 0.01 pct

NEW YORK, Nov 4 (Reuters) - U.S. stocks edged modestly higher on Monday in the wake of data showing that business spending dropped sharply in September and amid uncertainty over how soon the Federal Reserve would be comfortable enough with growth to begin scaling back stimulus.

U.S.-listed shares of Blackberry tumbled 10 percent to $6.99 after the smartphone maker said it was abandoning a plan to sell itself and instead, would replace its chief executive officer.

The benchmark S&P index has risen 4.3 percent over the prior four weeks as the partial U.S. government shutdown in October pushed back expectations for the Federal Reserve to begin curtailing its stimulus measures into the first quarter of 2014.

Indeed, St. Louis Federal Reserve President James Bullard told CNBC television the Fed should not rush a decision to scale back its asset purchase program because of low inflation.

Data on Monday showed new orders of non-military capital goods other than aircraft, an indicator of business spending plans, fell 1.3 percent during September, a sign that companies had cut investment plans sharply as politicians argued over the budget and debt limit.

But recent manufacturing data has been stronger than expected, lending weight to the argument that the economy may be sturdy enough to handle an earlier-than-expected tapering of the central bank's bond-buying program, which has helped buoy growth and the equity market for much of the year.

"In some ways you could say 'mission accomplished' for the Fed," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

"By broaching that (tapering) story early, yes they did have a fall off but now the markets adapted to it - they know it must end and it probably will end soon."

The Dow Jones industrial average rose 12.86 points, or 0.08 percent, to 15,628.41, the S&P 500 gained 1.69 points, or 0.1 percent, to 1,763.33 and the Nasdaq Composite dropped 0.201 points, or 0.01 percent, to 3,921.841.

Weyerhaeuser Co gained 0.3 percent to $30.44 after the company said it would sell its homebuilding division to Tri Pointe Homes Inc in a $2.7 billion deal that will leave Weyerhaeuser shareholders in control of one of the 10 largest homebuilders in the United States. Tri Pointe shares jumped 11.4 percent to $17.13.

Kellogg Co advanced 4 percent to $64.76 after the cereal maker reported a 3 percent rise in quarterly profit, and said it would slash 7 percent of its workforce by 2017.

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