NEW YORK (Reuters) – Stocks closed out the worst month in more than a year on an up note on Wednesday, with sharp gains in the last several days still not enough to repair the damage from a U.S. credit downgrade and fears of a slide back into recession.

Sentiment turned dramatically in recent days on expectations the Federal Reserve will again intervene to support the economy. With Wednesday's gains, the Dow was back in positive territory for 2011.

Banks led a late-day surge on Wednesday, helping to extend a four-day rally, followed by industrial shares. JPMorgan Chase & Co (JPM.N) rose 1.3 percent to $37.56 while Caterpillar Inc (CAT.N) was up 1.3 percent at $91.00.

Minutes from the most recent Fed policymakers' meeting released on Tuesday that indicated several Fed members favored more monetary easing bolstered the appetite for equities.

"The market has been somewhat schizophrenic lately, but the idea of more stimulus lets you put a rosy spin on everything," said Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group in Greenwich, Connecticut.

"Our rally has quieted down since the data wasn't great this morning, and we still don't know if that kind of weakness will be enough to trigger 'extraordinary action' from the Fed," he said.

Federal Reserve Chairman Ben Bernanke, at an annual Fed conference in Wyoming last week, said the U.S. central bank's scheduled meeting in September would run for two days instead of the planned one to mull options for additional monetary stimulus.

Data on hiring by private employers in August and factory activity in the U.S. Midwest released on Wednesday showed some signs of weakening growth.

The Dow Jones industrial average (.DJI) finished up 53.58 points, or 0.46 percent, at 11,613.53. The Standard & Poor's 500 Index (.SPX) was up 5.97 points, or 0.49 percent, at 1,218.89. The Nasdaq Composite Index (.IXIC) was up 3.35 points, or 0.13 percent, at 2,579.46.

The S&P 500 rose in seven of the past eight sessions for total gains of 8.5 percent, led by sectors tied to economic growth.

For August, though, the S&P fell 5.7 percent, its worst month since May 2010. The Dow fell 4.4 percent in August while the Nasdaq slumped 6.4 percent. It was the fourth straight down month for all.

Equities on Wednesday were volatile late in the session, turning briefly negative before snapping back into positive territory. Still, the volatility did not compare to early in the month, when Wall Street was marked by massive swings of more than 3 percent.

"The market has no conviction one way or the other, and the low volume exaggerates all the moves we get," said Carl Kaufman, who helps manage just under $2 billion at the Osterweis Strategic Income fund in San Francisco.

"We get some good numbers, but there are questions about the future, a lot of people are still seeking safety. The market is a zephyr in the whirlwind of headlines."

An index of factory activity in the U.S. Midwest slipped to its lowest level since November 2009, though the figures still pointed to manufacturing growth. A separate report showed private sector job growth slowed in August for a second straight month.

Tech shares weighed on the Nasdaq, with Apple Inc (AAPL.O) off 1.3 percent to $384.83 and chipmaker Nvidia Corp (NVDA.O) down 2.7 percent to $13.31.

Industrial stocks were among the top gainers, with the S&P industrials index (.GSPI) up 0.7 percent. Honeywell International (HON.N) gained 1.1 percent to $47.81 while Joy Global Inc (JOYG.O) rose 1.3 percent to $83.45. The company agreed to sell the drilling products business of recently acquired LeTourneau Technologies to Cameron International Corp (CAM.N) for $375 million.

Telecom stocks were the day's losers after the Obama administration filed to block AT&T Inc's (T.N) $39 billion proposed acquisition of T-Mobile USA from Deutsche Telekom (DTEGn.DE) because of anti-competitive concerns.

AT&T shares slumped 3.8 percent to $28.48, the biggest decliner on the Dow. The S&P Telecommunications index (.GSPL) dropped 1.6 percent, by far the biggest loser among S&P sectors.

New orders for U.S. factory goods rose more than expected in July as demand for transportation equipment surged, pointing to some resilience in manufacturing at the start of the third quarter.

Almost two stocks rose for every one that fell on the New York Stock Exchange, while on the Nasdaq slightly more stocks fell than rose.

About 8.2 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year's daily average of 8.47 billion.

(Editing by Leslie Adler)

NEW YORK (Reuters) – Stock index futures rose on Tuesday, indicating a rebound from a selloff in the previous session as strong results from IBM encouraged investors worried about macroeconomic uncertainties.

* International Business Machines Corp (IBM.N) said late Monday that new business at its services division surged more than expected in the second quarter, raising hopes 2011 would be a good year for the technology sector. Shares of the Dow component gained 1.7 percent to $178.20 in premarket trading.

* Bank of America, reporting quarterly results early Tuesday, said the performance in underlying businesses continued to be clouded by costs from legacy mortgage issues. The stock rose 1.9 percent to $9.90 before the bell.

* KeyCorp (KEY.N) reported early Tuesday that second-quarter earnings that beat expectations as bad loans fell.

* While concerns tied to government debt in the United States and Europe have dominated broader market action and contributed to the S&P’s worst week in the last five, the current earnings season has indicated that companies remained in solid shape. Last week, JPMorgan Chase & Co (JPM.N) and Google Inc (GOOG.O) rallied on strong results.

* S&P 500 futures rose 9.6 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures added 64 points and Nasdaq 100 futures gained 16 points.

* Earnings are due from bellwethers Goldman Sachs Group Inc (GS.N), Johnson & Johnson (JNJ.N) and Coca-Cola Co (KO.N). Apple Inc (AAPL.O) is scheduled to report after the market closes.

* Investors also awaited June housing starts data, due at 8:30 a.m. EDT <1230 GMT>. Economists in a Reuters survey forecast a 575,000 annualized rate in June versus 560,000 in May, and a total of 600,000 permits in June, compared with 609,000 in the prior month.

* Two weeks before a final deadline, U.S. President Barack Obama and top lawmakers faced more pressure for a debt deal amid a growing sense that a last-ditch plan taking shape in Congress may be the only way to avoid a devastating U.S. default.

* U.S. stocks dropped on Monday as bank shares bore the brunt of investor frustration over governments’ inability to solve debt crises in the United States and Europe.

(Editing by Jeffrey Benkoe)

LONDON – Better-than-expected U.S. jobs data boosted world stocks and the dollar on Friday as hopes that the world’s largest economy is on the mend offset the uncertainty over the conflict in Libya.

The Labor Department reported that U.S. employers added 216,000 new jobs last month, a bit better than expectations for a 190,000 increase. March’s increase was the biggest since last May and encouraged hopes that the U.S recovery is gathering pace.

Further good news emerged with the 0.1 percentage drop in the unemployment rate to a near two-year low of 8.8 percent.

“The March employment report was one of the cleanest reports we have had in a while and provided a clear-cut positive view on U.S. growth,” said Alan Ruskin, an analyst at Deutsche Bank.

European stocks and Wall Street futures advanced further in the aftermath of the data, while the dollar was buoyed by growing expectations that the Federal Reserve will raise interest rates sooner than anticipated.

“It is a clean, solid report, and should bring Fed rate hike expectations moderately forward,” said Ruskin.

In Europe, the FTSE 100 index of leading British shares was up 1.2 percent at 5,977 while Germany’s DAX rose 1.5 percent to 7,143. The CAC-40 in France was 0.9 percent higher at 4,026.

Dow futures were up 74 points at 12,326 while the broader Standard & Poor’s 500 futures rose 8.3 points at 1,329.

The figures also had a notable impact in the currency markets, which trade more closely on interest rate expectations than stocks. The euro has recently been gaining ground against the dollar on widespread predictions that the European Central Bank will raise borrowing costs at its monthly policy meeting next Thursday.

By mid afternoon London time, the euro was 0.4 percent lower at $1.4105 while the dollar rose 1.1 percent to 84.24 yen.

The euro has remained fairly stable in the wake of the Irish government’s latest attempt to draw a line under its massive banking sector losses. Though Thursday’s stress test results showed that the sector needed an additional euro24 billion ($34 billion) in cash, there are hopes that an announced overhaul of the banks will help the financial sector recover.

Though credit ratings agency Standard & Poor’s downgraded Ireland’s rating by one notch to BBB+, it heaped praise on the robustness of the stress tests and said the country has better growth prospects than other indebted countries in the eurozone, such as Greece and Portugal. As a result, it said another downgrade is not imminent.

The response in stock markets to the stress test results was mixed. Shares of the two banks that are due to survive the overhaul rose Friday, while the shares of Ireland’s only other publicly listed bank, Irish Life & Permanent, plunged to a record low. The latter will be broken up, with its profitable pensions and investment units facing sale in a public flotation.

Earlier in Asia, most markets advanced though Tokyo’s stocks continued to be buffeted by the repercussions of the March 11 earthquake and tsunami. The Nikkei closed 0.5 percent lower at 9,708.39.

Elsewhere, Hong Kong’s Hang Seng jumped 1.2 percent to 23,801.90 and South Korea’s Kospi added 0.7 percent to 2,121.01.

China’s Shanghai Composite Index gained 1.3 percent to 2,967.41 after a state-affiliated agency reported the country’s manufacturing regained momentum in March, easing fears of a sharp slowdown. China’s purchasing managers index, or PMI, rose to 53.4 last month, ending a three-month decline.

In the oil markets, the focus remained very much on Libya amid signs that forces loyal to Moammar Gadhafi are gaining ground. Their capture of another major eastern city has nearly reversed the gains rebels made since international airstrikes began over a week ago. The uncertainty has kept oil prices elevated — Libya accounts for a little under 2 percent of global oil production.

Benchmark crude for May delivery was up 53 cents at $107.25 a barrel in electronic trading on the New York Mercantile Exchange after settling at a 30-month high of $106.72 the day before.

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Pamela Sampson in Bangkok contributed to this report.

LONDON – Markets brushed off concerns over the financial future of Portugal as EU leaders looked to thrash out the final details of a package designed to deal with a government debt crisis that has already seen Greece and Ireland get bailed out.

Though Portugal’s borrowing costs in the markets rose to fresh euro-era highs Friday, the markets were serene Friday. The yield on Portugal’s ten-year bonds spiked to 7.8 percent — an unsustainable level — as investors appeared to think it’s inevitable that the cash-strapped country will end up being the third bailout victim in the eurozone.

Both Fitch and Standard & Poor’s warned Thursday that the country would find it more difficult to tap bond market investors in light of the political turmoil in the country.

On Wednesday, Portugal’s Prime Minister Jose Socrates resigned after the opposition refused to vote for additional budget cuts and revenue increases aimed at cutting the governments deficit. He is still in office as a caretaker, but many analysts say Portugal will need financial help before a new government can be elected.

Elsewhere though, markets were taking it all in stride. The euro remained well-supported above $1.40 — a long way above the $1.18 trough it hit last summer when Europe’s debt crisis seemed to threaten the existence of Europe’s single currency experiment.

By mid morning London time, the euro was trading 0.1 percent higher at $1.4161.

“Without a doubt the combination of credit ratings downgrades and political crisis surrounding a euro member would have been enough to send the euro into free fall during 2010,” said Jane Foley, senior currency strategist at Rabobank International.

Hopes that Europe’s debt crisis may not spread elsewhere was evident in the performance of Spanish government bonds — the yield on its ten-year bonds was down another 0.1 of a percentage point at 5.15 percent. In the hierarchy of Europe’s indebted, Spain is widely considered to be in the most perilous situation after Greece, Ireland and Portugal.

“In the absence of a new wave of fears concerning Spain, the euro looks to be dismissing the Portuguese crisis as a sideshow,” Foley said.

Analysts said the more optimistic tone in the markets was directly related to hopes that Europe has finally gotten a handle on the magnitude of its debt crisis after a shaky start. Measures for better budgetary discipline across the eurozone as well as increasing the size and scope of the EU rescue fund are set to be approved later Friday in Brussels.

In the stock markets, worries over Portugal’s immediate future were minimal and share prices continued to gain on the heels of a solid end to the week in Asia.

“The U.S. is set to release the third estimate of the last quarter’s GDP data and, barring any shocks here, it all looks set to be a positive finish to the week,” said Ben Critchley, a sales trader at IG Index.

The consensus in the markets is that the world’s largest economy grew by an annualized rate of 3 percent during the quarter, up modestly from the previous estimate of 3 percent.

Investors’ appetite for riskier trades, such as stocks, has been weighed down in recent weeks by the confluence of alarming events around the world. On top of Japan’s natural disasters, investors had to grapple with the potential implications of a nuclear meltdown and the escalating conflict in Libya.

In Europe, the FTSE 100 index of leading British shares was up 0.4 percent at 5,902 while Germany’s DAX rose 0.4 percent to 6,963. The CAC-40 in France was 0.3 percent higher at 3,979.

Wall Street was poised for a solid open — Dow futures were up 41 points at 12,157 while the broader Standard & Poor’s 500 futures rose 5.1 points to 1,310.20.

Earlier, the Nikkei 225 in Tokyo closed up 1.1 percent to 9,536.13 while Hong Kong’s Hang Seng index rose 1.1 percent to 23,158.67 and South Korea’s Kospi ended 0.9 percent higher to 2,054.04.

Meanwhile oil prices traded in fairly narrow ranges, with the benchmark New York rate up 23 cents at $105.33 a barrel.

Crude prices have jumped 25 percent since anti-government protests in Libya that began last month shut down most of the OPEC nation’s crude output. Western-backed military operations have pounded Libyan strongman Moammar Gadhafi’s forces to prevent them from attacking civilians, but rebels have so far been unable to mount an offensive to overthrow the regime.

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Pamela Sampson in Bangkok contributed to this report.

TOKYO – Asian stocks rose Tuesday as optimism about a global recovery got a perk from positive U.S. and European data. Markets in Japan, Australia, New Zealand and mainland China reopened after the New Year’s holiday to start trading in 2011.

Oil prices hovered below $92 a barrel in Asia near a two-year high as a stock market rally to start 2011 boosted crude trader optimism. In currencies, the dollar was up against the yen and the euro.

Japan’s Nikkei 225 stock average rose 1.7 percent to 10,398.10 in afternoon trading, while South Korea’s Kospi advanced 0.7 percent to 2,085.14 and Hong Kong’s Hang Seng index added 0.6 percent to 23,565.05.

Australia’s S&P/ASX 200 was down less than 0.1 percent at 4,742.5. Benchmarks in Taiwan and New Zealand were also down, while mainland China and Singapore indexes rose.

“We expect indicators about the American recovery to remain strong for some time, supporting stock prices,” said Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo.

But worries about a strong yen, which tends to batter auto and other Japanese exporter issues, may keep the surge of Tokyo stocks in check compared to overseas bourses, he said.

Machinery and energy stocks were bought, supported by prospects for continued growth in Asia and strong oil prices, Takeuchi said.

U.S. and European stocks rose on Monday after upbeat economic reports. In the U.S., the Institute of Supply Management’s index of manufacturing activity rose in December for the 17th straight month. Separately, the Commerce Department said construction spending rose 0.4 percent in November.

Meanwhile, economics analysis firm Markit reported that its purchasing managers’ index for eurozone manufacturers hit an eight-month high last month as stronger production growth and new orders lifted job creation. The firm said job growth broadened but remained centered on Germany, the Netherlands and Austria.

The Dow Jones industrial average rose 93.24 points, or 0.8 percent, to close at 11,670.75 on Monday. The broader Standard and Poor’s 500-stock index gained 14.23, or 1.1 percent, to 1,271.87. The Nasdaq composite index rose 38.65, or 1.5 percent, to 2,691.52.

In currencies, the dollar edged up to 82.16 yen from 81.65 in New York. The euro was slightly lower at $1.3342 from $1.3364.

Benchmark oil for February delivery rose 7 cents to $91.62 a barrel midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 17 cents to settle at $91.55 on Monday.

LONDON – Stock markets brushed aside better than expected U.S. economic data Thursday and traded lower as the peculiarities of year-end trading dominated activity. German and Japanese stocks led the retreat on their last trading day of the year.

Year-end trading is often complicated by traders closing out positions to present their portfolios in as good a light as possible. After all, bonuses are often dependent on how well those portfolios have actually performed.

In Europe, the FTSE 100 index of leading British shares was down 17.93 points, or 0.3 percent, at 5,978.43, while France’s CAC-40 fell 32.60 points, or 0.8 percent, to 3,858.05.

Germany’s DAX closed down 81.28 points, or 1.2 percent, at 6,914.19 on its shortened final trading day of the year. This year the DAX has risen nearly 1,000 points, or around 16 percent.

On Wall Street, the Dow Jones industrial average was down 14.65 points, or 0.1 percent, at 11,570.73 an hour into the session, while the broader Standard & Poor’s 500 index fell just over a point to 1,258.50.

The reaction to news that weekly jobless claims in the U.S. fell 34,000 last week to 388,000 — their lowest level since July 2008 — was muted. More good news — a survey regarding previously owned U.S. homes in November and a gauge of manufacturing activity around the Chicago region — also had little impact.

The U.S. economy will likely be the main issue next week when traders return from the holiday season, culminating in non-farm payroll figures for December.

Payrolls data often set the stock market tone for a week or two after their release, and the hope is that the recent improvement in the weekly release will provide further evidence that the U.S. economy is picking up steam.

Stocks have been buoyant in the last few months as expectations of another slide into recession around the world have dissipated. Most of the world’s major indexes are poised to post solid gains for 2010, and many are actually trading at their highest levels since Lehman Brothers collapsed in September 2008, which proved to be the catalyst to a banking crisis and the ensuing global recession.

In Asia earlier Thursday, Japanese stocks took a hammering, partly on year-end factors but also on concerns over the yen’s ongoing strength, which is making it more difficult for the country’s exporters to compete in international markets. By mid-afternoon London time, the dollar was up 0.1 percent down at 81.74 yen, just ahead of two-month lows.

Japan’s benchmark Nikkei 225 stock average fell 115.62 points, or 1.1 percent, to close at 10,228.92, meaning it has ended the year down around 3 percent, mainly on account of those yen-related concerns.

Chinese stocks continued to recover after sinking earlier this week in the wake of a surprise decision by the country’s monetary authorities to raise a key interest rate for the second time since October as they try to keep a lid on rising inflation.

The Shanghai Composite Index was up 8.05 points, or 0.3 percent, to end at 2,759.58, while Hong Kong’s Hang Seng index rose 30.04 points or 0.1 percent, to close at 22,999.34.

Oil prices are increasingly becoming a key worry in the markets as they have risen strongly in the wake of higher economic growth predictions. A number of analysts predict that a barrel of crude will soon spike above $100 a barrel.

Many analysts think that a big feature of 2011 will be what happens to oil prices and what the impact on inflation levels will be. If prices start to rise faster than anticipated, then central banks around the world may start considering raising interest rates from their current super-low levels sooner than they thought.

As with other financial assets, there’s some year-end bookkeeping taking place, and benchmark crude for February delivery was down 96 cents at $90.16 a barrel on the New York Mercantile Exchange.

The euro was ending the year on a solid note after a year of turmoil largely due to the government debt crisis that has afflicted the single currency zone. Recent hopes that policymakers are finally getting a handle on the crisis have helped alleviate the pressure on the euro.

By mid-afternoon London time, the euro was up 0.5 percent on the day at $1.3282.

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AP Business Writer Kelvin Chan in Hong Kong contributed to this report.

NEW YORK (Reuters) – Investors managed to keep an upbeat outlook in light preholiday trade on Thursday as data buttressed views of steady economic growth, with stocks on track for a fourth straight week of gains.

New home sales and prices edged up in November, while consumer sentiment rose in December to its highest level since June, reports showed.

Banking shares lagged as investors booked profits after a month-long rally that had sparked a nearly 17 percent rise in the KBW Bank index (.BKX).

The index shed 0.8 percent on Thursday, as Bank of America Corp (BAC.N) lost 1.9 percent to $13.12 and JPMorgan Chase & Co (JPM.N) fell 0.4 percent to $42.01.

“The economic data still points to a slow and measured recovery in 2011, whether it is housing, jobs or manufacturing. The U.S. is in the midst of a slow recovery here,” said Cort Gwon, director of trading strategies and research at FBN Securities in New York.

“It keeps up hopes, with the added liquidity from the government in 2011, it points to a solid market next year.” President Barack Obama recently signed a measure to extend tax cuts and extend unemployment benefits — considered another stimulus package.

In line with that outlook, the latest American Association of Individual Investors’ survey found bullish sentiment rose 13.1 percentage points to 63.3 percent, as of December 23, a six-year high.

The Dow Jones industrial average (.DJI) gained 8.67 points, or 0.08 percent, to 11,568.16. The Standard & Poor’s 500 Index (.SPX) dropped 1.79 points, or 0.14 percent, to 1,257.05. The Nasdaq Composite Index (.IXIC) shed 6.67 points, or 0.25 percent, to 2,664.81.

The S&P 500 rose Wednesday to its highest level since the collapse of Lehman Brothers more than two years ago.

Volume was light Thursday as Wall Street takes a break Friday for the Christmas holiday.

Retail stocks got a boost as Bed Bath & Beyond Inc (BBBY.O) rose 5.7 percent to $50.39 after topping profit estimates and forecasting a strong holiday season.

Fabric and crafts retailer Jo-Ann Stores Inc (JAS.N) jumped 32 percent to $60.25 after it agreed to a buyout by private equity firm Leonard Green & Partners for $61 per share.

The Morgan Stanley Retail index (.MVR) gained 0.5 percent.

Top U.S. memory chip maker Micron Technology Inc (MU.O) weighed on the Nasdaq. Its shares slipped 3.3 percent to $8 one day after it forecast lower pricing for NAND chips, which are used in smartphones and tablet computers.

Motorola Inc (MOT.N) spinoff Motorola Mobility Holdings Inc will replace Meredith Corp (MDP.N) in the S&P 500 index after the close on January 3, Standard & Poor’s said. Meredith shares dipped 1.2 percent to $35.39.

In other data, jobless claims dipped but indicated that unemployment will stay high, consumer spending rose for a fifth month, and durable goods orders recorded their biggest increase since March.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

LONDON (Reuters) – European shares pared losses in afternoon trade Tuesday after data showed a better-than-expected rise in U.S. retail sales in November.

By 1332 GMT, the pan-European FTSEurofirst 300 (.FTEU3) index of top shares was down 0.1 percent at 1,127.75 points.

(Reporting by Harpreet Bhal)

NEW YORK (Reuters) – U.S. stocks rose on Friday, with the S&P 500 at its highest level since the week Lehman Brothers collapsed in 2008, and breaching technical levels that suggest the year-end rally will persist.

Indexes closed near session highs with the Nasdaq Composite up for its eighth consecutive daily gain; in that time, the tech-heavy index is up 5.5 percent. The Nasdaq finished at its highest level since December 31, 2007. Volume was below average as is typical for this time of the year.

Industrial shares led the pack, with General Electric (GE.N) up more than 3 percent after it raised its dividend for a second time this year. The S&P industrial sector index (.GSPI) rose 1.03 percent.

After the S&P 500 ended on Thursday above 1,228, the closely watched 61.8 percent retracement of its drop from late 2007 to March 2009, the benchmark index managed to hold above that key level for a second day.

“That met some significant resistance so closing above there and staying above there is a pretty good sign,” said Art Hogan, chief market analyst at Jefferies & Co in Boston.

The S&P 500 tried and failed to breach 1,228 back in April and later in early November, with both attempts followed by steep declines.

The Dow Jones industrial average (.DJI) added 40.26 points, or 0.35 percent, to 11,410.32. The Standard & Poor’s 500 (.SPX) gained 7.40 points, or 0.60 percent, to 1,240.40. The Nasdaq Composite (.IXIC) rose 20.87 points, or 0.80 percent, to 2,637.54.

For the week, the indexes also posted gains. The Dow rose 0.2 percent, the S&P 500 was up 1.3 percent and the Nasdaq added 1.8 percent.

The Nasdaq Composite, boosted by a 2.3 percent gain in shares of Oracle Corp (ORCL.O), hit its highest level since December 2007. Oracle shares closed at $29.95.

In the latest signs of improvement in the U.S. economic recovery, data showed consumer sentiment rose more than expected in early December, according to the Thomson Reuters/University of Michigan survey, while import prices in November climbed at their fastest pace in a year.

Another positive signal came from the Commerce Department, which said the U.S. trade deficit narrowed much more than expected in October.

Overseas news helped boost equities, after a slew of data showed China’s imports and exports jumped in November, bank lending topped forecasts and property investment powered ahead. China increased reserve requirements for banks but kept interest rates on hold.

GE jumped 3.4 percent to $17.72 after the company said quarterly payments to shareholders will increase by 2 cents to 14 cents per share.

Lifting the S&P health care index (.GSPA), Tenet Healthcare Inc (THC.N) shares jumped 55 percent to $6.65, easily surpassing the $6-per-share bid from Community Health Systems Inc (CYH.N) and likely forcing the potential buyer to raise its offer for the rival hospital company.

Community Health shares rose 13.4 percent to $35.89.

Shares of Netflix Inc (NFLX.O) rose after Standard & Poor’s said the company, along with F5 Networks Inc (FFIV.O), Newfield Exploration Co (NFX.N) and Cablevision Systems Corp (CVC.N), will be added to the S&P 500 index after trading closes next Friday.

Netflix added 1.9 percent to $194.63, Cablevision jumped 4.1 percent to $34.72, Newfield gained 3.3 percent to $72.37 and F5 Networks rose 3 percent to $143.09.

About 7.4 billion shares traded on the New York Stock Exchange, the American Stock Exchange and the Nasdaq, below the year’s average of 8.62 billion.

Advancing stocks outnumbered declining ones on the NYSE by a ratio of almost 2 to 1, while on the Nasdaq, more than two stocks rose for every one that fell.

(Reporting by Rodrigo Campos; Editing by Jan Paschal)

NEW YORK (Reuters) – Wall Street rose on Thursday after upbeat data on housing and retail sales and as European officials extended a liquidity safety net for vulnerable banks, soothing investor anxiety about the region’s debt crisis.

U.S. retailers reported higher-than-forecast sales for November, while pending home sales unexpectedly surged in October, hinting the economic recovery has legs. Also, the four-week moving average for jobless claims fell to a fresh two-year low, though new claims were higher for the week.

“Fear is evaporating ever so slightly. The economy is not falling off a cliff, giving investors a glimmer of hope,” said Kim Caughey Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

The Dow Jones industrial average (.DJI) gained 74.73 points, or 0.66 percent, to 11,330.51. The Standard & Poor’s 500 Index (.SPX) rose 8.96 points, or 0.74 percent, to 1,215.03. The Nasdaq Composite Index (.IXIC) added 16.07 points, or 0.63 percent, to 2,565.50.

Financial shares led gains, with the KBW bank index (.BKX) up 3.1 percent. Wells Fargo & Co (WFC.N) added 3.5 percent to $28.49.

“The ECB and Federal Reserve have implied they are not going to let that segment fail,” said Forrest. “They are allowing years for banks to work out the problems that they are in.”

Further supporting stocks, the euro rose against the U.S. dollar on talk the European Central Bank had been buying government bonds of so-called peripheral euro-zone nations. The euro has recently traded in the same direction as U.S. equities.

The Dow and the S&P 500 scored their biggest gains in three months on Wednesday as optimism over efforts to resolve the EU’s debt crisis helped push the S&P above 1,200.

If the S&P 500 continues to hold above that level, the market uptrend will see strong resistance at 1,225-1,230, which coincides with a recent two-year high and the 61.8 percent Fibonacci retracement of the benchmark’s slide from October 2007 to March 2009, a key technical indicator.

Goldman Sachs forecast on Thursday that the S&P 500 will close 2011 at 1,450, boosted by positive earnings amid a steadily improving U.S. economy. It also upgraded the financials, energy and consumer discretionary sectors.

U.S. President Barack Obama’s top economic advisers were to resume negotiations Thursday with congressional leaders, hoping to break a deadlock over expiring tax cuts.

In company news, PepsiCo Inc (PEP.N) agreed to buy Russian juice and dairy producer Wimm-Bill-Dann (WBD.N). Wimm-Bill-Dann U.S.-traded shares jumped 28.1 percent to $31.38.

American International Group Inc (AIG.N)’ shares edged up 0.6 percent to $42.54 after Reuters reported the insurer could receive at least three separate bids for its Taiwan unit. AIG rose 1.3 percent to $42.84.

(Reporting by Rodrigo Campos)