The Standard & Poor's 500 Index rose for a third day, erasing losses for the year, as energy shares surged the most in almost three months and consumer-spending data boosted optimism on the economy.

Commodity companies surged for a second day as crude climbed to a two-week high and industrial metals gained on optimism the Chinese and American economies will spark demand for resources. Chevron Corp. rallied 3.9 percent and copper miner Freeport-McMoRan Inc. jumped 16 percent for its biggest gain since in August. Celgene Corp. rose 9.8 percent after settling a patent dispute over its top-selling drug. Micron Technology Inc. lost 2.2 percent after its quarterly sales missed estimates.

The Standard & Poor's 500 Index increased 1.2 percent to 2,064.29 at 4 p.m. in New York, as a three-day rally of 2.9 percent erased its decline for the year. The Dow Jones Industrial Average climbed 184.93 points, or 1.1 percent, to 17,602.20. The Nasdaq Composite Index added 0.9 percent. Trading in S&P 500 shares was 16 percent lower than the 30-day average. U.S. exchanges will close early on Thursday for the Christmas holiday and reopen on Dec. 28.

Equities extended a rally in this holiday shortened week, recovering from a slide to a two-month low as data showing consumers' willingness to spend buoyed optimism toward the outlook for growth. Investors were loading up on some of the year's biggest losers in search of bargains among energy and raw-materials shares.

A report today showed an increase in consumer purchases in November was accompanied by rising wages and scant inflation, indicating the biggest part of the U.S. economy will continue to underpin growth. Separate data showed orders for U.S. capital goods dropped in November for the first time in three months, showing businesses began tempering new investment after a third-quarter surge.

The consumer spending data is the latest evidence that the economy is sturdy enough to weather tighter monetary policy from the Federal Reserve. Purchases climbed by the most in three months in November, which follows a report yesterday showing consumer spending bolstered the economy in the third quarter. Other gauges today showed consumer confidence rose to the highest since July, while new homes sold at a slower pace than projected in November.

Investors have wrestled with signals that are often at odds as they assess prospects for the global economy. Optimism on the pace of U.S. growth has tangled with concern that a slowdown overseas, particularly in China, will spread. Fed officials last week signaled faith that the economy is performing well, while emphasizing they're in no hurry to further boost interest rates.

The S&P 500 has rebounded more than 10 percent from the bottom of a summer selloff that was sparked by worries over weakness in China. The benchmark historically rises in December, but the so-called Santa rally is under pressure this year. The gauge is down 0.8 percent this month, after losing as much as 3.4 percent.