U.S. stocks close higher; Nasdaq gains on week
NEW YORK (MarketWatch) -- U.S. stocks closed higher Friday, lifting the Nasdaq Composite Index back into the black for the week, after the European Central Bank said it would take further steps to ease loan collateral for banks.
The Dow Jones Industrial Average (DJIA) rose 67.21 points, or 0.5%, to 12,640.78. It lost 1% for the week, after posting gains for the past two.
The market rallied "on short covering from the selloff from [Federal Reserve Chairman Ben] Bernanke's disappointing game of 'Twister' instead of a full blown QE3, some relief that the bank downgrades didn't spell out disaster and news from Europe that it is loosening their collateral requirements," said Keith Springer, president of Springer Financial Advisors.
Down 0.6% on the week, the S&P 500 Index (SPX) rose 9.51 points, or 0.7%, to 1,335.02 for the session, with technology stocks leading the gains that included all 10 of its industry groups.
Up 0.7% for the week, the Nasdaq (COMP) advanced 33.33 points, or 1.2%, to 2,892.42.
For every stock falling, more than two gained on the New York Stock Exchange, where 1.6 billion shares had traded by the close.
Commodities also recovered a piece of the prior day's steep slide, with oil bouncing off an eight-month low. Crude futures (CLQ2) rose $1.56, or 2%, to $79.76 a barrel, down 5.4% for the week. Gold (GCQ2) gained $1.40, or 0.1%, to end at $1,566.90 an ounce, down 3.8% from the week-ago close. Read more on gold.
Late Thursday, Moody's Investors Service downgraded the credit ratings on 15 global banks. None was cut more than the ratings agency had projected.
"Now that we know who was downgraded, it wasn't so bad," said Jack Ablin, chief investment officer at Harris Private Bank.
The European Central Bank said Friday it would ease rules on the collateral banks can offer for central-bank funds. Bloomberg News cited a person familiar with the plan as saying that Spain was considering making investors holding bank equity and debt to take losses in a restructuring.
"First you hear a lot of good strong talk, until the market doesn't want to hear it anymore; then you get a lot of monetary policy, until the market doesn't want to hear it anymore," added Ablin, who likens the scenario in the European Union to the United States. "In Europe, it's up to Germany; here it's up to Congress," he remarked of the longer-term fixes needed to bolster the global economy.
Also Friday, Spain's finance minister confirmed the government would formally ask for aid for its banks on Monday. An independent audit of Spain's banking sector released Thursday found that the nation could need as much as $80 billion to recapitalize its banks.
On Thursday, U.S. equities took their second-hardest knock so far this year on signs of a slowdown in global manufacturing. Read about Thursday's action in U.S. stocks.