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Friday, December 19, 2014

Wall Street up for 3rd day, led by energy shares

US stocks extended gains for a third session, giving the S&P 500 its best weekly performance in nearly two months as energy shares continued to rebound.

The S&P energy index jumped 3.1 percent, leading the benchmark index's advance, and closed out the week with a 9.7 percent gain, its biggest weekly increase since December 2011.

The benchmark S&P 500 has gained 5 percent over the three sessions, bouncing back quickly from recent losses sparked by a selloff in oil prices.

The key driver of this week's rally was the US Federal Reserve's commitment on Wednesday to take a "patient" approach toward raising interest rates, which relieved investors over the policy outlook.

The Dow Jones industrial average rose 26.65 points, or 0.15 percent, to 17,804.8, the S&P 500 gained 9.42 points, or 0.46 percent, to 2,070.65 and the Nasdaq Composite added 16.98 points, or 0.36 percent, to 4,765.38.

For the week, the Dow gained 3 percent, the S&P 500 rose 3.4 percent and the Nasdaq climbed 2.4 percent.

Helping to lift energy shares, Brent crude rose 3.6 percent at $61.38 a barrel, while WTI crude jumped 4.5 percent to settle at $56.52. Energy shares have recovered in the recent rally even when oil prices continued to fall.

Quadruple witching - the expiration of stock options, index options, index futures and single-stock futures - added to the day's volatility. Volume was high. About 10.9 billion shares changed hands on US exchanges, above the 7.6 billion average this month, according to BATS Global Markets.

Shares of Red Hat surged 10.6 percent to $68.04 after it raised its profit forecast for the full year and reported quarterly revenue and profit above expectations.

On the downside, shares of Nike shed 2.3 percent to $94.84, a day after the company flagged slowing growth in western Europe.

NYSE advancing issues outnumbered decliners 2,004 to 1,102, for a 1.82-to-1 ratio; on the Nasdaq, 1,420 issues rose and 1,329 fell for a 1.07-to-1 ratio.

The benchmark S&P 500 posted 110 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 131 new highs and 52 new lows.

In Europe, stocks edged lower as a late advance was hindered by Swiss drugmaker Roche after two of its major drugs failed tests, with Italian banks under pressure from a downgrade by S&P.

The euro zone blue-chip EuroSTOXX 50 and the Swiss SMI both ended down 0.4 percent as all major continental indexes fell.

However, the FTSEurofirst 300 index of top European shares , which was boosted by a 1.2 percent surge in stocks on Britain's FTSE 100, rallied with Wall Street to end 0.4 percent higher at 1,361.07.

Healthcare stocks took the most points off the FTSEurofirst 300, with Roche the top faller, down 6.3 percent after tests of new Alzheimer's and breast cancer drugs both failed. Analysts said forecasts for 2015 would have to be revised downwards.

The STOXX Europe 600 Health Care index fell 0.7 percent, the biggest sectoral faller.

The FTSEurofirst 300 built on a 3 percent advance on Thursday to reverse earlier losses and end 3 percent higher on the week, its biggest weekly gain in a year, helped by the US Federal Reserve's commitment to be "patient" about raising interest rates.

Peripheral euro zone indexes were under pressure after Standards and Poor's cut Italian bank ratings, saying growth would be slower than expected.

Banks Monte Paschi, Intesa Sanpaolo and UniCredit were down between 1.9 and 4.2 percent. Italy's FTSE MIB index fell 0.4 percent.

Some of the pressure on euro zone stocks came from sources telling Reuters that European Central Bank officials were considering ways to place conditions on any potential stimulus programme.

Air France-KLM tumbled 8.1 percent after issuing its third profit warning in six months. It cut its 2014 earnings goal by 200 million euros as higher-than-expected costs from a recent pilot strike added to weaker unit revenues.

Germany's BASF was down 1.6 percent, accounting for half the fall on the DAX, after abandoning an asset swap with Russia's Gazprom.

The DAX was down 0.3 percent on the day.

Meanwhile, Japanese stocks posted their best day in 6-1/2 weeks as investors continued to take heart from the US Federal Reserve's "patient" approach to raising interest rates, while awaiting comments from the head of the Bank Of Japan after it held policy steady.

The Nikkei benchmark ended 2.4 percent higher at 17,621.40, its biggest daily percentage gain since early November. For the week, the index is up 1.4 percent.

The Bank of Japan maintained its massive monetary stimulus and offered a brighter view of the economy. The broader Topix added 2.4 percent to 1,409.61, while the JPX-Nikkei Index 400 gained 2.5 percent to 12,799.29.

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