US STOCKS-Wall Street gains, govt shutdown extends for fourth day
* Shutdown in fourth day amid fears it will involve debt limit decision
* Dow, S&P 500 rebound after week of losses
* IPO filing shows Twitter had loss in first half of year
* Indexes: Dow up 0.3 pct, S&P up 0.4 pct, Nasdaq up 0.6 pct
NEW YORK, Oct 4 (Reuters) - U.S. stocks rose on Friday after a week of losses driven by uncertainty surrounding the partial shutdown of the U.S. government.
The S&P 500 has fallen for nine of the past 12 sessions, but several stock sectors rose on Friday, led by materials, which were up 0.8 percent, and healthcare up 0.6 percent.
Many investors fear the budget impasse will drag on until bickering Washington lawmakers are faced with reaching agreement to raise the debt ceiling and avoid a default in less than two weeks.
Investor confidence was boosted on Thursday when newspaper reports said Republican House Speaker John Boehner told his party colleagues he would work to avoid a U.S. debt default.
"Now there is sort of a timeline. When we first started looking at 1/8the shutdown 3/8, it looked like it could go on for weeks," said Thomas Nyheim, vice president and portfolio manager at Christiana Trust in Greenville, Delaware. "But not if it's coming out of the Republican conference that they are going to figure this out before we hit the debt ceiling."
Boehner and House Majority Leader Eric Cantor reiterated a call for negotiations on Friday but did not indicate any change in their positions. House Republicans have tried unsuccessfully to use the emergency funding bill to delay the new healthcare law and attach provisions that would only fund government agencies piecemeal.
Democrats and President Barack Obama want a simple vote on funding the entire federal government.
While a short-term federal government closure would have a modest economic impact, there could be damage to the modest recovery the longer the shutdown lasts.
The debt ceiling issue is considered more critical. The Treasury Department warned a debt default would be "catastrophic."
Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, said the shutdown would hurt growth in the last quarter of this year, while the Bank of Japan said an extended budget standoff would have a severe global impact.
The Dow Jones industrial average was up 48.20 points, or 0.32 percent, at 15,044.68. The Standard & Poor's 500 Index was up 7.43 points, or 0.44 percent, at 1,686.09. The Nasdaq Composite Index was up 23.54 points, or 0.62 percent, at 3,797.88.
While shutdown concerns have pressured equities over the past two weeks, the S&P 500 index has frequently found support at its 50-day moving average of 1,679.61, though it closed slightly below that level on Thursday.
The CBOE Volatility Index, a measure of investor anxiety, has been rising lately but was down nearly 3 percent to 17.15 on Friday, historically a low reading for the VIX.
The benchmark S&P is down 1.6 percent this week, while healthcare stocks are up 0.4 percent.
Nyheim, who owns health care stocks, noted the industry's performance may be attributed to the opening of state healthcare exchanges on Tuesday and the possibility that medical device manufacturers may have their taxes lowered from rates currently in the Affordable Care Act, also called Obamacare.
"In the short term, it may be the exchanges, but we look at it much more long term. And there may be some kind of deal where the medical device manufacturers won't have the same tax," said Nyheim.
Government economic data has been delayed because of the shutdown, and the September payrolls report from the Labor Department was not released as scheduled.
Twitter Inc gave potential investors their first glance at its financials on Thursday when it publicly filed documents for an initial public offering. The information showed that revenue at the social networking company almost tripled in 2012, though it posted a loss in the first half of 2013.
Potbelly Corp said late Thursday its initial public offering of 7.5 million shares had priced at $14 each. In its first day of trading, the stock rose 138 percent to $33.33.