By Ryan Vlastelica
NEW YORK (Reuters) - U.S. stocks were little changed on Friday as stronger-than-expected data on manufacturing gave investors a reason to buy despite massive equity gains so far this year.
The S&P 500, on track to close out a seventh straight positive month, has gained 3.5 percent in May and more than 15 percent in 2013 after repeatedly scaling new highs. Over the past seven months, the index has appreciated about 17 percent.
Equities initially opened lower as investors took profits following recent gains, but the market pared those losses after the Chicago Purchasing Managers Index came in stronger than expected in May with a reading of 58.7, above forecasts that called for a reading of 50.
The stock market advance has largely come on supportive monetary policies from central banks around the world, which has helped the markets avoid the Wall Street adage of "sell in May, go away," which refers to a historical trend of seasonal weakness that tends to begin in May and continue through the summer. The S&P fell 6.3 percent in May 2012.
"We're in a goldilocks environment where the economy is recovering, but not so much that the Fed will pull the punch bowl away too quickly," said Kristina Hooper, head of portfolio strategies at Allianz Global Investors in New York.
Shares have been volatile over the past few weeks on uncertainty over when the Federal Reserve's stimulus programs will be scaled back or stopped.
"There's a push and pull between good economic data and concerns that the data is so good the Fed will start to taper," said Hooper. "But right now, investors continue to use drops as buying opportunities."
The Dow Jones industrial average was down 3.63 points, or 0.02 percent, at 15,320.90. The Standard & Poor's 500 Index was down 1.54 points, or 0.09 percent, at 1,652.87. The Nasdaq Composite Index was down 0.50 points, or 0.01 percent, at 3,490.80.
For the week, the Dow is up 0.1 percent, the S&P is up 0.2 percent and the Nasdaq is up 0.9 percent.
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Personal income was flat in April, while consumption dipped 0.2 percent. Analysts were looking for a rise of 0.1 percent for both. Futures were little changed by the data.
The final May Thomson Reuters/University of Michigan reading on consumer sentiment was 84.5, above expectations for 83.7.
Trading may be volatile near the close of markets as the MSCI indexes are slated to rebalance at the end of the day. Credit Suisse forecast $19 billion in total trading as a result of the rebalancing, with $15 billion related to developed markets.
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Clearwire fell 1.1 percent to $4.45 while Sprint fell 0.7 percent to $7.29.
(Editing by Bernadette Baum)
