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Wall Street pares gains as oil prices fall

Wall Street pared some of its gains as oil prices fell on Thursday, but remained in positive territory as investors scoured for bargains ahead of a widely expected U.S. interest rate hike next week.

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A trader works shortly after the opening bell on the floor of the New York Stock Exchange in the Manhattan borough of New York, December 8, 2015. (REUTERS/Lucas Jackson)

Wall Street pared some of its gains as oil prices fell on Thursday, but remained in positive territory as investors scoured for bargains ahead of a widely expected U.S. interest rate hike next week.

Major U.S. stock indexes have had a bruising week as a rout in oil prices took a toll on the energy sector.

Brent futures are down more than 11 percent this month and, having dipped below $40 per barrel, there are renewed expectations it might test 2008's low.

"The market is on a pause mode till we get some direction from the Fed," said Kim Forrest, senior equity research analyst, Fort Pitt Capital Group in Pittsburgh.

"There is some amount of bargain hunting too as investors are price sensitive and we're going to see some sloppy trading today, because there is no major economic data or news."

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As concerns regarding the global economy persist, all eyes will be on the Federal Reserve's meeting on Dec. 15-16, when it is expected to raise rates for the first time in nearly a decade.

Traders are pricing in an 85 percent chance of a rate hike next week, according to the CME Group's FedWatch.

"A rate hike is locked in and if they don't raise next week, they will upset every market," Forrest said.

At 12:28 p.m. ET (1728 GMT) the Dow Jones industrial average <.DJI> was up 59.02 points, or 0.34 percent, at 17,551.32, the S&P 500 <.SPX> was up 4.67 points, or 0.23 percent, at 2,052.29 and the Nasdaq Composite <.IXIC> was up 15.64 points, or 0.31 percent, at 5,038.50.

Seven of the 10 major S&P 500 sectors were higher with the energy index's <.SPNY> 1.02 percent rise leading the advancers. The index is clawing back some losses after dropping more than 10 percent since the beginning of the month.

Chevron's <CVX.N> 1.9 percent rise gave the biggest boost to the Dow and the S&P.

Data showed the number of Americans filing for unemployment benefits rose to a five-month high of 282,000 last week, but likely does not signal a deterioration in the labor market as the underlying trend remained consistent with tightening conditions.

Twitter <TWTR.N> shares were up 6.8 percent at $25.96 after the company said it was testing a feature to show advertising to people who checked the website without logging in, to cash in on an additional half a billion people each month. Men's Wearhouse <MW.N> slumped 20.5 percent to $14.76, a day after the men's apparel retailer warned it may miss lower end of its forecast.

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First Solar <FSLR.O> was down 10.2 percent at $52.80 after the solar company's 2016 forecast came in below analysts' expectations.

GoPro <GPRO.O> was up 11.3 percent at $18.79, while Yum Brands <YUM.N> fell 2.7 percent to $71.79 after the company's same-restaurant sales in China fell about 3 percent in November.

Advancing issues outnumbered decliners on the NYSE by 1,487 to 1,434. On the Nasdaq, 1,476 issues rose and 1,214 fell.

The S&P 500 index showed 2 new 52-week highs and 13 new lows, while the Nasdaq recorded 20 new highs and 74 new lows.

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