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    U.S. stocks rise as investors look to next year
    Monday December 16, 2:30 pm ET
    By Herbert Lash

    NEW YORK, Dec 16 (Reuters) - Stocks rose on Monday as investors shrugged off lackluster consumer spending for the critical holiday shopping season and looked to 2003, snapping up beaten-down shares after two weeks of market declines.

    There was no economic news to drive stocks higher, either, as investors looked past another down year for Wall Street and such worries as a possible U.S. war with Iraq to take cash from safe-havens like government bonds and put into stocks.

    The three major market gauges were on track to post their biggest single-day gains in almost three weeks.

    "If you start looking to 2003, people who have greater hopes for some kind of recovery and a resolution to Iraq are driving some allocation into equity," said John Davidson, president and chief executive of PartnerRe Asset Management, which oversees $4 billion in assets.

    Retailers like Wal-Mart Stores Inc. (NYSE:WMT - News) gained ground even in the face of lukewarm demand in the final shopping week before Christmas. And banking stocks snapped back from recent losses, sending the Philadelphia Stock Exchange's Bank Index (Philadelphia:^BKX - News) up 2.76 percent.

    The Dow Jones industrial average (CBOT:^DJI - News) rose 148 points, or 1.76 percent, to 8,581.94 with only three stocks in the 30-share index down. The broader Standard & Poor's 500 Index (CBOE:^SPX - News) gained 16 points, or 1.8 percent, to 905.64, while the technology-laced Nasdaq Composite Index (NasdaqSC:^IXIC - News) was up 27 points, or 2 percent, at 1,389.55 in afternoon trading.

    Trading volumes were moderate, however, with the typically sluggish periods around the Christmas and New Year's holidays approaching. About 810 million shares traded on the New York Stock Exchange; 941 million shares changed hands on Nasdaq.


    A Lehman Brothers analyst's decision to raise the firm's exposure to U.S. equities in its model portfolio and cut its allocation to Europe, excluding the United Kingdom, helped underpin the rally, traders said.

    All three key market gauges wrapped up a second straight week of losses last week in the wake of an eight-week autumn rally that pulled the S&P 500 and the Dow from five-year lows and the Nasdaq off of six-year lows hit in early October.

    "People are thinking you had two weeks of getting beat up ... and things are no longer overbought, and the market always seems to rally around the Christmas holiday," said Henry Herrmann, chief investment officer at Waddell & Reed. "So you're getting traders fooling around on the margin with a positive bent."

    Shares of oil-related companies climbed in sync with crude oil prices, which jumped to more than $29 a barrel in New York as a strike crippling Venezuela's oil operations dragged into its third week. The American Stock Exchange's Oil Index (AMEX:^XOI - News) climbed 1.7 percent. Shares of oil giant Exxon Mobil (NYSE:XOM - News) rose 72 cents to $35.76.

    Retailers were in focus, after Wal-Mart Stores said its sales last week were at the low end of its expectations for December. Federated Department Stores (NYSE:FD - News), parent of the Macy's and Bloomingdale's stores, said it expects holiday sales at stores open at least a year will be at the low end of its forecast range.

    Wal-Mart's shares leaped $1.30 to $51.84, and federated rose 27 cents to $29.

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