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Updated from 12:45 p.m. EDT

Stocks in New York ripped higher Friday as the optimism surrounding another drop in oil prices helped offset a big loss and dividend cut at government-sponsored mortgage packager

Fannie Mae




Dow Jones Industrial Average

jumped 302.89 points, or 2.7%, to 11,734.32, and the

S&P 500

surged 30.25 points, or 2.4%, to 1296.31. The


was better by 58.37 points, or 2.5%, at 2414.10.

The latest pullback in oil prices provided support for equity buyers. Near-term crude futures sank $4.82, or 4%, to settle at $115.20. Oil is now more than $30 below the all-time high it hit less than a month ago.

The rally erased all of the losses from the prior session, when the Dow lost 224.64 points, or 1.9%, to 11,431.43, and the S&P 500 fell 23.13 points, or 1.8%, to 1266.06. The Nasdaq gave back 22.64 points, or almost 1%, at 2355.73.

When the new day arrived, traders were initially upbeat, sending stock futures higher, but Fannie Mae's results reversed some of the momentum temporarily. The company lost $2.3 billion in the second quarter, and like fellow home financer

Freddie Mac

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, slashed its dividend payout in order to preserve capital.

On a per-share basis, Fannie Mae lost $2.54 a share, more than triple what analysts expected. The dividend payment was taken all the way down to 5 cents a share from 35 cents in the previous quarter. Shares of Fannie Mae lost 9%.

However, the buyers returned after their initial reluctance, and the stock market remained on an upward path throughout the day.


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ha a different result than Fannie Mae, as the bond insurer posted a second-quarter profit of $1.7 billion after factoring in $3.3 billion in pretax derivatives gains. Shares of the monoline gained 3%.

Among research calls, Credit Suisse made a number of moves on several widely held tech stocks, including


(AAPL) - Get Apple Inc. Report

which was initiated with an outperform rating and a $200 price target. The firm also started



with an outperform and an $18 target.


(HPQ) - Get HP Inc. Report



(IBM) - Get International Business Machines Corporation Report

were initiated with neutral ratings.

The selloff in commodities came as the U.S. dollar soared against its major counterparts. The euro, the pound, the Swiss franc, the Australian dollar and the Canadian dollar all had steep losses against the U.S. currency.

Overseas, many of Europe's stock markets recovered from losses and ended higher. Hong Kong's Hang Seng fell by 1%, while Tokyo's Nikkei added 0.3%.

A notable decline was in Russia, where the Micex Index surrendered 4.8% on word that fighting has broken out between Russian and Georgian forces. Russian Prime Minister Vladimir Putin said that a war has begun in Georgia's South Ossetia region, where locals want to form a breakaway republic.

Turning to Treasury prices the 10-year note was down 2/32, yielding 3.93%, and the 30-year bond was up 11/32, yielding 4.54%.

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This article was written by a staff member of