* S&P 500 posts best weekly performance since December
* Pan-European index rises
* Dollar resumes month-long run
(Updates with U.S. markets close)
By Lewis Krauskopf
NEW YORK, Nov 20 (Reuters) - Shares in major markets gained
on Friday and the euro weakened against the dollar as investors
anticipated actions by U.S. and European central banks next
month.
The benchmark U.S. S&P 500 posted its best week in almost a
year, while Europe's main stock index tallied its strongest week
in a month. U.S. Treasuries prices fell, with rising U.S. stock
prices reducing the appeal of lower-yielding government debt.
The head of the European Central Bank, Mario Draghi, offered
the strongest hint yet that the ECB will unveil fresh stimulus
measures at its Dec. 3 meeting.
"Any siren call from a central bank, particularly a
systemically important one, about more largesse on the part of
that central bank's balance sheet to try to reflate economic
activity is sort of a cause-and-effect for why financial assets
then accompany in that rally," said Mark Luschini, chief
investment strategist at Janney Montgomery Scott in
Philadelphia.
Investors in recent days have also increasingly come to
expect that the U.S. Federal Reserve will raise interest rates
next month, which would be the first rate increase in almost a
decade.
The head of the New York Fed, William Dudley, said the Fed
should "soon" be ready to raise interest rates as U.S. central
bankers grow confident that low inflation will rebound and that
employment will remain stable.
"We've seen a nice bounce in stocks as they've digested to
the likelihood of a December rate hike," said Kim Rupert,
managing director of global fixed-income analysis at Action
Economics in San Francisco.
The Dow Jones industrial average .DJI rose 91.06 points,
or 0.51 percent, to 17,823.81, the S&P 500 .SPX gained 7.93
points, or 0.38 percent, to 2,089.17 and the Nasdaq Composite
.IXIC added 31.28 points, or 0.62 percent, to 5,104.92.
Nike (N:NKE) NKE.N shares rose 5.5 percent after the sportswear
maker unveiled a $12 billion share buy-back program.
The pan-European FTSEurofirst 300 index .FTEU3 climbed 0.2
percent, near three-month highs.
An index of leading global markets .MIWD00000PUS also rose
0.2 percent.
At a press conference in Frankfurt, Draghi addressed the
ECB's considerations at its upcoming meeting: "If we decide that
the current trajectory of our policy is not sufficient to
achieve our objective, we will do what we must to raise
inflation as quickly as possible."
His comments put pressure on the euro EUR= , which fell
against the dollar after two days of gains. The euro was off 0.8
percent and slipped below $1.07.
"With the ECB easing policy, I would be very surprised if
the euro didn't fall through parity," Mark Burgess, chief
investment officer at Columbia Threadneedle Investments, told
the Reuters Global Investment Outlook Summit on Friday.
The dollar .DXY rose 0.6 percent against a basket of
currencies, resuming its march upward over the past month.
Benchmark 10-year U.S. Treasuries US10YT=RR were down 5/32
in price to yield 2.264 percent, while the 30-year bond
US30YT=RR was down 11/32 in price to yield 3.021 percent.
Brent oil futures LCOc1 settled up 48 cents at $44.66 a
barrel, helped by short-covering. U.S. crude CLc1 fell nearly
4 percent to below $39, before recovering to settle down 15
cents at $40.39 a barrel.
Spot gold fell 0.4 percent, ending a two-day bounce
and up from the lowest level in nearly six years.