US STOCKS-Wall St climbs on oil boost in wake of Fed statement

* Brent crude climbs over $63 a barrel

* Initial claims point to strengthening labor market

* Oracle (NYSE: ORCL - news) up in premarket after results

* Indexes up: Dow 1.3 pct, S&P 1.34 pct, Nasdaq 1.33 pct (Updates to open, adds Markit (NasdaqGS: MRKT - news) data)

By Chuck Mikolajczak

NEW YORK, Dec 18 (Reuters) - U.S. stocks rose on Thursday, with each of the major indexes climbing more than 1 percent, building on the prior session's rally after the U.S. Federal Reserve's policy statement and oil prices that showed signs of steadying.

The benchmark S&P 500 index had notched its best day since October 2013 on Wednesday after the Federal Reserve gave an upbeat assessment of the U.S. economy and said it would take a patient approach toward raising interest rates.

"The bottom line is a June (rate hike) is still in play and even doves need to tighten at some point when the numbers start looking good," said James Liu, global market strategist at JPMorgan Funds in Chicago.

"The economy is improving, things are picking up, they need to get the ball rolling on this."

Oil prices continued to climb Thursday, extending a rebound off five-year lows, with Brent crude rising as high as $63.70 and WTI crude up nearly 2 percent, before paring gains. Exxon Mobil rose 2 percent to $90.80 and the S&P Energy sector rose 1.5 percent after a jump of over 4 percent in the prior session.

"On the oil front, the fact you have seen energy pop by about five percent the last two days, there is the notion out there that oil has certainly stabilized," said Liu.

The Dow Jones industrial average rose 225.8 points, or 1.3 percent, to 17,582.67, the S&P 500 gained 26.92 points, or 1.34 percent, to 2,039.81, and the Nasdaq Composite added 61.71 points, or 1.33 percent, to 4,706.02.

Weekly jobless claims fell by 6,000 to a seasonally-adjusted 289,000, against expectations for 295,000, suggesting the labor market continued to strengthen.

Financial data firm Markit said its "flash" services Purchasing Managers Index hit 53.6 in December, down from November's final reading of 56.2 and well below economists' expectations for a rise to 56.9. However, it remained above the 50 threshold indicating expansion.

Oracle Corp advanced 7.5 percent to $44.25 after quarterly results topped Wall Street expectations, helping to lift the S&P technology sector by 1.8 percent.

Canadian convenience store operator Alimentation Couche-Tard (Other OTC: ANCUF - news) Inc said it will buy U.S. convenience store chain The Pantry Inc for $1.7 billion, including debt. Pantry shares gained 2.5 percent to $36.40.

Rita Aid shares surged 12.4 percent to $6.81 after the drugstore chain's quarterly results topped expectations and it boosted its 2015 outlook.

Advancing issues outnumbered declining ones on the NYSE 2,611 to 288, for a 9.07-to-1 ratio; on the Nasdaq, 1,912 issues rose and 442 fell, for a 4.33-to-1 ratio favoring advancers.

The S&P 500 was posting 33 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 87 new highs and 10 new lows.

(Editing by Bernadette Baum and Nick Zieminski)