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US STOCKS-S&P and Dow gain, while Nasdaq falls in volatile session

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* Dow up 0.32 pct, S&P up 0.04 pct, Nasdaq down 0.88 pct

* "Quadruple witching" leads to volatility say traders

* Defensive stocks lead; tech and communication services lag

* Nike jumps after results top estimates, boosts S&P and Dow

* Fed's Williams says central bank open to reassessing views (Adds details, updates prices)

By Medha Singh

Dec 21 (Reuters) - Wall Street swung between losses andgains in volatile trading on Friday that traders blamed on theexpiration of stock futures and options, with only the defensivesectors staying higher consistently, highlighting concerns overslowing growth.

The S&P 500 was up much as 1.5 percent at its highest,before falling 0.36 percent to a session low. The S&P and DowIndustrials though stayed higher for most of the session, whilethe Nasdaq, which came within a whisker of confirming bearmarket territory on Thursday, was largely lower.

The volatility was mainly due to "quadruple-witching" — whenoptions on stocks and indexes as well as futures on indexes andsingle-stocks for the quarter all expire — which tends to raisevolatility and trading volumes as investors replace expiringpositions.

"We had a bit of a bounce, but it's options expiration, so Idon't expect the market to regain any substantial strength fromthe recent selloff," said Peter Cardillo, chief market economistat Spartan Capital Securities in New York.

"Volatility is probably going to be accompanying themovements in the market today."

The markets opened higher and hit session highs after NewYork Federal Reserve President John Williams said the centralbank is open to reassessing its views and listening to marketsignals that the economy could fall short of expectations.However, he said that for now further rate hikes appearappropriate.

Williams' comments on CNBC come after the Fed said onWednesday it would largely stick to its plan to keep raisinginterest rates, spooking investors already grappling withmounting evidence of slowing growth and triggering a two-dayslide on Wall Street.

Helping stanch the bleeding on Friday was Nike IncNKE.N ,which jumped 7.85 percent after the company's quarterly resultsbeat Wall Street estimates on strength in North America. Thestock was the biggest driver of gains on the Dow Industrials andS&P 500.

The four top gainers among the 11 major S&P sectors includedthe defensive consumer staples .SPLRCS , utilities .SPLRCU and real estate .SPLRCR indexes.

Most of the markets gyrations came as the technology index .SPLRCT and the communication services index .SPLRCL , whichhouse high-growth names such as Facebook IncFB.O and AlphabetInc GOOGL.O , swung between gains and losses.

At 11:45 a.m. ET, the Dow Jones Industrial Average .DJI was up 72.11 points, or 0.32 percent, at 22,931.71, the S&P 500 .SPX was up 0.88 points, or 0.04 percent, at 2,468.30 and theNasdaq Composite .IXIC was down 57.66 points, or 0.88 percent,at 6,470.75.

Adding to the nerves was the turmoil in Washington.

President Donald Trump threatened a "very long" governmentshutdown just hours ahead of a midnight deadline on a fundingdeal, while the resignation of U.S. Defense Secretary Jim Mattisafter falling out with Trump also sparked concerns.

"A big problem is this chaotic administration. There is somuch turmoil. It's an ongoing political problem that createsuncertainties," Cardillo said.

"Any rallies are not sustainable until we have capitulation,and so far we haven't had that."

The three main Wall Street indexes are already in correctionterritory, having fallen more than 10 percent from their recordclosing highs, and are closing in on bear market territory,which is marked when an index closes more than 20 percent belowits closing high.

Declining issues outnumbered advancers for a 1-to-1 ratio onthe NYSE and a 1.51-to-1 ratio on the Nasdaq. The S&P indexrecorded no new 52-week highs and 61 new lows, while the Nasdaqrecorded four new highs and 445 new lows.

Medha.Singh@thomsonreuters.com medha.singh.thomsonreuters.com@reuters.net


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Reuters

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