* Red Hat gains after earnings, outlook
* Blackberry up after earlier tumble following results
* Final GDP reading tops expectations
* Indexes up: Dow 0.4 pct, S&P 0.4 pct, Nasdaq 0.46 pct
By Chuck Mikolajczak
NEW YORK, Dec 20 U.S. stocks climbed on Friday,
putting the S&P 500 on pace for its biggest weekly gain in two
months, as an unexpectedly strong report on U.S. growth boosted
investor confidence that the economy could support a wind-down
of Federal Reserve stimulus.
Gross domestic product grew at a 4.1 percent annual rate in
the third quarter, the fastest pace in almost two years, and
higher than the 3.6 percent pace reported earlier this month.
Business spending was also stronger than previously estimated.
"Maybe it's not going to impact the fourth quarter (GDP) but
it can certainly lift 2014. The consensus is moving that way, we
are looking towards improved economic strength as we move into
2014," said Tim Ghriskey, chief investment officer of Solaris
Group in Bedford Hills, New York.
"The change is the fact equities are up on this news, maybe
even just a month ago they would have been down on this news
with the feeling this means the Fed is going to tighten or taper
Volume is expected to be active, as investors deal with the
last "quadruple witching" day of the year, with the quarterly
expiration and settlement of December contracts for stock
options, stock index options, stock index futures and single
In addition, most U.S. funds will adjust their portfolios as
a result of rebalancing by index providers. Credit Suisse
expects the rebalancing to result in over $30 billion in total
trading at today's close.
On Wednesday, the central bank modestly trimmed the pace of
its market-friendly monthly asset purchases, by $10 billion to
$75 billion, and suggested its key interest rate would stay at
rock bottom longer than previously promised.
The S&P 500 has gained more than 27 percent this year
and is on track for its biggest yearly gain since 1997, largely
fueled by the Fed's stimulus aimed at boosting the economy.
Fed Chairman Ben Bernanke said if U.S. job gains continue as
expected, the bond purchases would likely continue to be cut at
a "measured" pace through much of next year, probably being
wound down "late in the year, certainly not by the middle of the
The Dow Jones industrial average rose 64.66 points,
or 0.4 percent, to 16,243.74, the S&P 500 gained 7.19
points, or 0.4 percent, to 1,816.79 and the Nasdaq Composite
added 18.688 points, or 0.46 percent, to 4,076.823.
Red Hat Inc jumped 18.8 percent to $58.23 as the
best performer on the S&P 500 after the world's largest
commercial distributor of the Linux operating system reported
third-quarter results above analysts' estimates and raised its
Blackberry Ltd reported a massive quarterly
loss on Friday due to an inventory writedown and asset
impairment charges. Still, U.S.-listed shares advanced 1.9
percent to $6.37 after falling more than 7 percent in premarket
Walgreen Co edged up 0.8 percent to $57.41 after the
largest U.S. drugstore operator reported higher first-quarter
Oracle Corp dipped 0.02 percent to $36.59 after it
said it would buy Responsys Inc in a deal valued at
$1.5 billion as the world's No. 2 software maker beefs up its
cloud offerings. Responsys shares surged 38.4 percent to $27.02.
Jones Group Inc climbed 4.8 percent to $14.81 after
the company said on Thursday it had agreed to be bought by
Sycamore Partners for $15 per share, or $1.2 billion.