Global equities extend rally; oil rebounds, helping rouble rise

NEW YORK: Equity markets worldwide extended the week's rally on Friday and oil prices rebounded from recent lows, as investors closed out the last full week of trading in 2014 on an upbeat note.

Wall Street rose, and the S&P 500 came within a few points of its closing record high. The index has gained 5 percent since Wednesday for its best three-day stretch since 2011.

The release on Wednesday afternoon of the U.S. Federal Reserve's last policy statement of the year, in which it pledged to be patient in raising rates, injected markets with a jolt of enthusiasm. Japan's recommitment to its massive economic stimulus campaign pushed Asian stocks to their best day in 15 months, and oil's rebound helped bolster the flailing Russian rouble.

"Fears have been at least pushed once again to the sidelines," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

The president of the San Francisco Fed, John Williams, on Friday told Bloomberg Radio that it was "reasonable" to think the Fed would raise rates in mid-2015, in line with comments from other Fed governors.

The Dow Jones industrial average <.DJI> rose 0.15 percent to 1,7804.70, while the S&P 500 <.SPX> gained 9.42 points, or 0.4 percent, to 2,070.65, and the Nasdaq Composite <.IXIC> added 0.4 percent to 4,765.38.

The S&P energy index <.SPNY> jumped 3.1 percent on Friday.

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

The MSCI All World Index <.MIWD00000PUS> gained 0.6 percent on Friday; its Asia Ex-Japan Index <.MIAS00000PUS> rose 1.6 percent.

Brent oil prices rebounded, gaining 5 percent to hit $62 a barrel in a recovery from near a 5-1/2-year low, as investors squared books ahead of the year-end after a six-month slide. [O/R]

The rise in oil, which along with gas is among Russia's chief source of export revenue, helped the rouble claw back another 5 percent of the roughly 58 percent it had lost between the end of June and Monday.

The rouble this week slumped as much as about 20 percent against the dollar despite a massive hike in Russian interest rates, putting at risk the stability on which President Vladimir Putin has built his popularity.

Yields on U.S. 10-year bonds fell slightly to 2.18 percent in U.S. trading. Traders attributed the buying of Treasuries to the market having been oversold in recent days.

The euro fell to a 28-month low against the dollar, driven by the prospect of bond buying by the European Central Bank. The yen was also weaker against the dollar, at 119.50, dented by Japan's ongoing monetary stimulus measures. [FRX/]

In Europe, worries emerged that the European Central Bank's money-printing plans could come with a number of restrictive strings attached.

Officials speaking to Reuters on condition of anonymity said the ECB may require countries such as Greece or Portugal to set aside extra money or provisions to cover potential losses from any bond-buying it embarks on next year.- Reuetrs