US stocks closed higher on Friday, led by financial companies including JP Morgan Chase, Bank of America and American Express after the US Senate passed a financial overhaul bill.
The Dow Jones Industrial Average rose 125.38 points (1.25%) to 10,193.39. For the week, the measure fell 4.02%, its largest weekly drop since the week ended May 7, the day after the so-called flash crash. The Dow is now off 2.25% for the year to date.
JP Morgan led the Dow's gains with a jump of $2.22 (5.87%) to $40.05. Bank of America followed with an increase of 69 cents (4.5%) to $15.99, while American Express advanced $1.20 (3.1%) to $39.82.
The rise in the financial stocks came as the US Senate's passage of its bill removed some of the uncertainty that has plagued the sector for months. While the Senate still needs to reconcile its bill with the one passed by the House of Representatives in December, the vote on Thursday night provided some clarity because the Senate bill had undergone a multitude of changes and amendments, keeping pressure on the stocks.
The Nasdaq Composite rose 25.03 (1.14%) to 2,229.04. The measure dropped 5.02% this week and is down 1.77% for the year.
The Standard & Poor's 500 climbed 16.10 (1.5%) to 1,087.69. For the week, it fell 4.23%, and it is now down 2.46% for the year.
All of the S&P 500's sectors ended Friday's session in the black, led by financials.
The gains across the other sectors came as investors, while still worried about the euro zone's sovereign-debt issues, were being lured back into the market by the cheaper valuations created by the recent declines.
Derivatives-exchange operators CME Group jumped $15.51 (5.1%) to $318.51, and IntercontinentalExchange climbed $5.57 (5.1%) to $115.09, as the Senate's financial-overhaul bill would require banks to post collateral for swap trades in clearinghouses run by CME and ICE.
Dell tumbled 97 cents (6.8%) to $13.35. The computer giant's fiscal first-quarter profit rose 52% as shipments jumped and revenue rose in each product segment, but investors were disappointed by a drop in the company's margins.
Aeropostale advanced $1.35 (5%) to $28.64. The teen retailer's fiscal first-quarter earnings jumped 43% as sales and margins climbed.
CSX added $1.33 (2.7%) to $51.09. A broker raised its outlook on the railroad operator to positive from stable, citing the company's "strengthened operational performance and expectations of an improving financial profile."
Frontline rose $1.56 (5.4%) to $30.67. The oil-tanker company's first-quarter earnings rose 4.4% on a divestiture gain and lower investment and currency losses, while charter rates jumped from late last year.
Intuit climbed $1.26 (3.7%) to $35.01. The tax-software maker's fiscal third-quarter profit increased 19% on a strong performance during the recent tax season as its small-business segments returned to double-digit sales growth.
For Australian ADRs listed on the NYSE, BHP Billiton firmed $3.43 (5.8%) to US$62.53, Rio Tinto Plc added $2.61 (6.55%) to US$42.48, ResMed weakened $1.43 (2.29%) to US$61.13, Telstra Corporation increased 13 cents (1.07%) to US$12.31, Telecom Corporation of NZ remained unchanged at US$6.61 and Westpac improved $6.08 (6.89%) to US$94.34.
At 7:45 AM (AEST), the 10-year Treasury note yield was 3.24% and the five year yield was 2.02%.
European shares dropped again on Friday, though they closed well off earlier lows, as investors continued to fret about prospects for the economic recovery.
The Stoxx Europe 600 index, which fell nearly 3% early in the session, eventually finished down just 0.5% to 237.04.
Friday's decline, after a brutal session on Thursday, brought weekly losses for the pan-European stock market index to 4.6%.
Although the German parliament approved the country's contribution to the joint International Monetary Fund/European Union support package for euro zone countries struggling with fiscal deficit levels on Friday, the country spooked investors earlier in the week with its go-it-alone ban on short-selling.
Of the regional benchmarks, the German DAX index fell 0.7% to 5,829.25, the French CAC-40 index dropped 0.1% to 3,430.74 and the UK FTSE 100 index declined 0.2% to 5,062.93.
With selling taking place across most sectors in Europe, drug stocks declined and GlaxoSmithKline shares lost 2.3% and Sanofi-Aventis shares 1.4%.
Companies more closely leveraged to economic growth trends were also weak, with BASF down 0.9% in the chemicals sector.
Oil and gas companies also lost ground. Royal Dutch Shell shares fell 1.1%. Oil giant BP, which is continuing to battle to clear up an oil spill in the Gulf of Mexico, fell 4.2%.
Of companies updating investors, airline British Airways saw it shares add 1%. It lost ground in the previous session when a court lifted an injunction that prevented cabin crew from striking. British Airways said that its fiscal-year net loss widened to GBP425m pounds, from GBP358m a year ago. The latest quarter's operating loss includes seven days of strike action with a net cost of £43m. Still, the firm said that market conditions are showing improvement from depressed levels in 2009/10 and it's targeting revenue growth of 6% and breakeven at the profit before tax level for fiscal 2011.
On the FTSE 100, Rio Tinto climbed 97.00 pence (3.45%) to 2,909.00 pence and BHP Billiton increased 49.00 pence (2.77%) to 1,817.50 pence.
Asian shares were down on Friday, but many markets were off their lows as some investors picked up shares recently battered by continuing fears about Europe's debt crisis.
Japan's Nikkei Stock Average ended down 2.5% at a fresh 2010 low of 9,784.54, but had recovered some of its earlier fall of more than 3.0%. China's Shanghai Composite Index reversed earlier losses and turned higher to close up 1.1%. Hong Kong was closed for a public holiday.
The global rout in equities triggered by worries about Europe and the euro swept through the New Zealand share market, pushing it to a nine-month low. The NZX-50 Index dropped 2.0%, or 61.33 points, to 3,050.08, its lowest close since Aug. 21. The index fell 4.4% during the week.
Base metals on the London Metal Exchange traded higher as the euro rose against the US dollar and equities stabilised. Aluminium rose $65 (3.27%) to $2,055 while copper firmed $245 (3.73%) to $6,815 and nickel added $230 (1.09%) to $21,390. Zinc strengthened $25 (1.34%) to $1,895 and lead gained $55 (3.16%) to $1,795. Comex copper was last quoted at 306.10 US cents per pound.
Gold hit a two-week low but bounced off its weakest levels as investors resumed buying the metal due to worries about Europe's ongoing sovereign-debt issues. Spot gold was last quoted at $1,177.85. Comex gold futures dropped $12.50 (1.05%) to $1,176.10. Spot silver was last quoted at $17.59.
Crude oil continued to weaken despite support from the equity and currency markets, a sign that economic worries are testing investors' faith that future oil demand will catch up with today's high supply levels. West Texas Intermediate was last quoted at US$68.04 per barrel.
At 07:45 a.m. (AET) the US dollar was quoted at 0.7974 euros, 90.28 yen, 1.202 AUD and 69.14 pence.