What a Week: Bad News, What Bad News? Market Psychology Shifts

SAN FRANCISCO -- With astounding speed, abject misery turned to abject joy this week.

The reversal of investors' fortunes occurred almost precisely at midweek as stocks mounted a remarkable recovery from harrowing declines Wednesday morning. That session emboldened the long-suffering bottom pickers, whose optimism was rewarded with a blockbuster rally Thursday. A satisfying follow-through concluded the week, which saw the Dow Jones Industrial Average rise 0.3%, the S&P 500 climb 1.7% and the Nasdaq Composite jump 5%.

The weekly advance was the first for major averages since the five days ended Sept. 1. ...