Wall Street rises on upbeat data, S&P holds key level

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.

Traders work on the floor of the New York Stock Exchange December 2, 2010. REUTERS/Brendan McDermid

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