Stocks Make Furious Move Late to Close Higher

Stocks, in another volatile session, rallied to a strong close as Germany's approval of eurozone aid eased some uncertainty. Gregg Greenberg has The Real Story.
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NEW YORK (

TheStreet

) -- The

Dow Jones Industrial Average

ended Friday's session more than 100 points higher on the same day that it dipped below 10,000 as markets sought stabilization after Germany acceptanced its portion of the eurozone rescue package.

Stocks threatened to give up gains as volatility took hold in the last hour of trading, but a late rally pushed major U.S. indices up near session highs. The Dow Jones Industrial Average added 125 points, or 1.3%, to close at 10,193. The

S&P 500

gained 16 points, or 1.5%, to 1088, and the

Nasdaq

increased by 25 points, or 1.1%, to 2229.

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Although indices finished Friday's session ahead, they ended lower on the week: The Dow lost 4%, the S&P shed 4.2% and the Nasdaq was off by 5%.

The

Senate passed

an extensive overhaul of financial markets regulation late Thursday by a vote of 59 to 39. The Senate bill, which includes an amendment that seeks to limit banks' risks by forcing bank holding companies to spin off profitable derivatives trading operations, will now go to a conference committee for reconciliation with the House of Representatives' measure. The proposal also imposes new regulations on complex securities, makes it easier to liquidate big, failing firms, and creates a consumer protection agency.

German lawmakers approved the country's portion of the nearly $1 trillion eurozone rescue package.

UBS economist Larry Hatheway blames European regulators for the insecurity that has been destabilizing global markets.

Sports Boosting Media Stocks (Forbes)

"It is the inability of European politics to address these sources of insolvency in a pre-emptive manner that has compounded the uncertainty that now plagues markets. The timing and nature of the 'end-game' remain in question," Hatheway said. "Matters were made worse by Germany's unilateral decision to ban certain forms of 'short-selling.' The move underscored divisions within the eurozone, but also reinforced the perception that politicians will reach for cosmetic and politically-motivated gestures, rather than come up with genuine solutions."

Addressing fears that steep losses could indicate something deeper, Hatheway said recent weakness still feels like a correction but he warned that it could have further to run.

"We recommend a cautious stance in global asset allocation. We prefer non-cyclical commodities, defensive stocks and U.S. corporate credit. Relative to our economic outlook, 'safe-haven' government bonds appear significantly overvalued -- we recommend underweight allocations," he said.

Overseas, Hong Kong's Hang Seng was closed for a holiday, and Japan's Nikkei dropped 2.5%. The FTSE in London dipped 0.2%, and the DAX in Frankfurt lost 0.7%.

The Economy

Both Germany's upper and lower houses of parliament approved the country's portion of the €750 billion ($939.5 billion) eurozone rescue package: €123 billion and €147.6 billion in loan guarantees.

German Chancellor Angela Merkel

There are no economic releases scheduled for Friday's session.

The Treasury Department told Congress that the

projected cost of the Troubled Asset Relief Program decreased since TARP repayments have been greater than originally expected, with roughly $190 billion already repaid. Additionally, values of major investments -- such as

Citigroup

(C) - Get Report

shares -- have strengthened. Costs fell by $11.4 billion, to $105.4 billion since the release of the Obama administration's fiscal year 2011 budget in early February.

Company News

Financial and basic materials sectors saw the strongest gains during Friday's session.

Shares of

JPMorgan Chase

(JPM) - Get Report

,

Bank of America

(BAC) - Get Report

,

American Express

(AXP) - Get Report

and

Caterpillar

(CAT) - Get Report

were the Dow's best performers.

On the

New York Stock Exchange

,

Global Geophysical Services

(GGS)

and

CAI International

(CAP)

were the best performing stocks and

Citigroup

(C) - Get Report

, Bank of America and

Ford

(F) - Get Report

were the most actively traded.

Dell

(DELL) - Get Report

topped analysts' estimates with adjusted earnings of 30 cents a share late Thursday.

Shares of

Marvell Technology

(MRVL) - Get Report

gained 8.3% after the company said several new products would likely result in better-than-expected second-quarter results.

Google

(GOOG) - Get Report

got approval from the Federal Trade Commission to acquire mobile advertising company AdMob.

Intuit

(INTU) - Get Report

shares rose 3.7% on the company's third-quarter earnings beat and increased full-year outlook.

China's

Sinochem

is buying a 40% stake in an offshore oil field in Brazil's Campos basin from

Statoil

(STO)

for $3.07 billion in cash.

PepsiCo

(PEP) - Get Report

plans to invest another $2.5 billion in China over the next three years, which comes in addition to the $1 billion the beverage company invested in the country in 2008.

Mitsubishi Heavy Industries

filed an antitrust lawsuit against

General Electric

(GE) - Get Report

, alleging that the company sought to drive it out of the wind turbine market, according to a

Financial Times

report.

Commodities and the Dollar

Crude oil for July delivery lost 76 cents, or 1.1%, to settle at $70.04 a barrel.

Elsewhere in commodity markets, the June

gold contract shed $12.50, to settle at $1,176.10 an ounce.

The dollar was trading lower against a basket of currencies, with the

dollar index down by 0.7%.

Treasuries

The benchmark 10-year Treasury rose 5/32, lowering the yield to 3.200%.

The two-year note fell 2/32, lifting the yield to 0.747%. The 30-year bond increased 12/32, diluting the yield to 4.072%.

--Written by Melinda Peer in New York

.