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Wall St. has best second day gain since 2011 on Fed optimism

By Caroline Valetkevitch

Reuters

5:02 PM EST, December 18, 2014

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The S&P 500 closed out its biggest two-day advance since November 2011 on Thursday, extending a Federal Reserve-fueled rally from the previous session, while tech shares jumped after Oracle results.

The Dow industrials recorded the best one-day percentage gain since December 2011. The S&P 500 posted its biggest daily percentage gain since January 2013 and is up 4.5 percent in the last two sessions.

Equities' rally followed the Fed's upbeat assessment of the U.S. economy on Wednesday and a commitment to take a "patient" approach toward raising interest rates.

A 3-percent jump in the technology sector <.SPLRCT> also helped Thursday's advance. Oracle Corp jumped 10.2 percent to $45.35, a day after quarterly results topped Wall Street expectations. Shares of Apple climbed 3 percent to $112.65.

"What happened this week was a game-changer. That easy money trade came to the forefront, and it's so powerful it wipes out all of these concerns that exist," said Adam Sarhan, chief executive of Sarhan Capital in New York.

The Dow Jones industrial average <.DJI> rose 421.28 points, or 2.43 percent, to 17,778.15, the S&P 500 <.SPX> gained 48.34 points, or 2.4 percent, to 2,061.23 and the Nasdaq Composite <.IXIC> added 104.08 points, or 2.24 percent, to 4,748.40.

U.S. crude fell 4.2 percent, but the S&P Energy sector <.SPNY> ended up 2.1 percent.

The S&P 500 had fallen nearly 5 percent from its most recent record high on Dec. 5 before the strong gains on Wednesday and Thursday.

Earlier in the session, data showed weekly jobless claims fell more than expected, suggesting the labor market continues to strengthen. However, readings on the U.S. services sector and mid-Atlantic factory activity indicated a slower pace of growth.

Rite Aid shares surged 11.9 percent to $6.78 after the drugstore chain's quarterly results topped expectations and it boosted its 2015 outlook.

About 8.7 billion shares changed hands on U.S. exchanges, above the 7.5 billion average this month, according to BATS Global Markets.

NYSE advancers outnumbered decliners 2,522 to 589, for a 4.28-to-1 ratio; on the Nasdaq, 2,093 issues rose and 655 fell, for a 3.20-to-1 ratio favoring advancers.

(Additional reporting by Charles Mikolajczak; Editing by Nick Zieminski)