* Oil prices fall after Goldman Sachs cuts forecast
* S&P poised for biggest weekly gain since July
* Zumiez falls after cutting third-qtr forecast
* Dow up 0.5 pct, S&P up 0.2 pct, Nasdaq up 0.3 pct (Updates to late afternoon)
By Caroline Valetkevitch
Sept 11 (Reuters) - U.S. stocks edged higher late Friday afternoon, putting the S&P 500 on track for its biggest weekly gain since July, but energy shares dropped after Goldman Sachs cut its oil price forecast through next year.
Eight of the 10 S&P 500 sectors were higher, led by gains in the consumer discretionary index, up 0.6 percent. Shares of homebuilders were up, bouncing back from Thursday’s decline after JP Morgan raised price targets on PulteGroup , up 1.9 percent, and Meritage Homes, up 2.5 percent.
Oil prices fell after the Goldman forecast, which cited oversupply and concerns over China’s economy. Goldman said crude oil could fall as low as $20 a barrel. ConocoPhillips, down 2.6 percent at $47.17, was the biggest drag on the S&P 500.
Economic data clouded the outlook for interest rates ahead of the Federal Reserve’s policy meeting next week.
U.S. consumer sentiment dropped to its lowest level in a year in early September, while unchanged producer prices for August pointed to moderate economic growth and tame inflation.
The Fed has said it will raise rates when it sees a sustained economic recovery, especially in the job market.
“The market overall seems to be shrugging off the decline in oil prices and disappointments from a number of retailers in recent days,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.
He said investors could be positioning ahead of the weekend and more economic data from China.
At 3:14 p.m., the Dow Jones industrial average rose 76.57 points, or 0.47 percent, to 16,406.97, the S&P 500 gained 4.39 points, or 0.22 percent, to 1,956.68 and the Nasdaq Composite added 15.55 points, or 0.32 percent, to 4,811.80.
Stocks have been volatile since China devalued its currency in August amid concerns of sputtering growth in the world’s second-largest economy. The S&P 500 has had moves of at least 1 percent in 11 sessions since Aug. 20.
Investors pulled another $15.9 billion from U.S. equities over the past week as they sought safety in government bond funds, Bank of America Merrill Lynch said.
Gilead rose 1.9 percent to $109.26 after the company’s $10 billion debt offering this week fueled speculation that it was planning a big acquisition.
On the down side, Zumiez fell 27.9 percent to $15.62 after the sports apparel and accessories maker forecast third-quarter sales and profit below analysts’ estimates. (Additional reporting by Tanya Agrawal; Editing by Nick Zieminski)