Updated from 3:13 p.m. EDT
Stocks backed off from their afternoon highs into Friday's close, as traders tackled another round of earnings releases and a fresh set of economic data.
Dow Jones Industrial Average
tacked on 144.32 points, or 1.6%. at 9325.01, and the
was up 14.66 points, or 1.5%, to 968.75. The
was better by 22.43 points, or 1.3%, to 1720.95.
The session's end marked the finish of a rough-and-tumble October, during which the Dow experienced its biggest selloff since 1987. The S&P posted its biggest monthly loss since 1998. The Nasdaq last logged worse monthly losses in 2001.
The dismal month nonetheless was capped off with an impressive rally for the final week. Over the past five trading days, the Dow gained 11%, the S&P 500 added 10% and the Nasdaq climbed 11%.
releases were again in focus.
reported a 33% year-over-year decrease in profits for the third quarter, but met the Street's expectations.
Elsewhere in the financial sector, British bank
announced plans to raise $11.8 billion from the private sector, thus avoiding participation in the U.K.'s bank-bailout plan.
UBS downgraded shares of insurance firm
to neutral from buy, citing difficulties the firm may face selling its assets to raise capital. AIG shares bounced higher anyway, adding 16% to $1.89.
announced it would modify mortgages to help 400,000 households avoid foreclosure. The company said it will make alterations to $70 billion in loans over the next two years and put an embargo on foreclosures of Chase-owned loans while it implements changes to its lending strategy. JPMorgan shares added 8.6% to $40.86.
Speaking in California on the impact of the mortgage meltdown on the economy, Fed Chairman Ben Bernanke discussed different alternatives for reorganizing government-sponsored entities
( FNM) and
( FRE), which the administration took into conservatorship in September. He said that it would be necessary to create a market for home loans that would fund and securitize mortgages without posing systemic risk to financial markets. Fannie shares dropped 6.4% to 93 cents, and Freddie gave back 8% to $1.03.
reported that regulators are set to approve a clearinghouse for credit-default swaps in the coming weeks. Regulators view the $55 trillion CDS market as a source of systemic risk for the financial system, as default by a major counterparty could reverberate throughout the financial markets.
Back in earnings news, energy company
reported rising profit thanks to high oil prices. The stock climbed 0.6% to $74.60.
Meanwhile, fast-food restaurant operator
announced income that rose slightly year over year and reaffirmed its forward outlook. Shares slipped 1.2% to $20.01. Cleaning-products maker
likewise saw a slight rise in earnings for the quarter and affirmed its profit guidance, although it tempered its revenue expectations. The stock edged up 2.7% to $60.81.
As for the automakers,
announced it would bring 1,000 workers back to a truck plant in anticipation of high demand for one of its new trucks. Shares dropped 4% to $2.19.
In other automotive news,
reported a decline in quarterly profit and guided lower for the remainder of the year, sending shares tumbling 9.3% to $9.61.
also reported that talks of a merger between
are being pushed back as the Bush administration refused to fund a deal. GM skidded 4.6% to $5.79.
Looking at the day's economic data, the Department of Commerce reported that consumer spending declined 0.3% in September after holding steady in July and August. Economists were expecting a 0.2% contraction in spending. Personal income growth registered at 0.2%, ahead of consensus estimates of 0.1% but less than a 0.5% increase in August.
The Department of Labor also said its employment cost index rose 0.7% for the third quarter, a rise that was in line with expectations.
The Chicago Purchasing Managers Association's manufacturing index for October registered at 37.8, down from 56.7 in September and below the consensus forecast of 48. The University of Michigan's revised consumer sentiment index came in at 57.6, slightly above the 57.5 expected by analysts.
The market offers a great buying opportunity, Jim Paulsen, chief investment strategist at Wells Capital Management, wrote in an email. He said that the market may continue to retest and even break to new lows but that compelling valuations, great investor fear and an emphatic policy response to the financial crisis offer reason to believe the market is bottoming.
Doreen Mogavero, president and CEO of Mogavero Lee, wrote that global economic data continues to worsen and that strength in the dollar will hurt U.S. companies' ability to thrive on exports. However, she also said bullish indicators include a potential slowdown in
, continued improvement in debt markets and a lot of money on the sidelines waiting to enter the market.
Shifting to commodities, crude oil rose $1.85 to $67.81 a barrel. For the month, crude dropped 33%, its biggest price decline on record. Gold dropped $20.30 to $718.20 an ounce.
Longer-dated U.S. Treasury securities were mixed. The 10-year note was up 1/32 to yield 3.96%, and the 30-year was down 21/32, yielding 4.37%. The dollar was rising vs. the euro and pound but slightly weaker against the yen.
Credit markets continued to improve, as three-month dollar Libor, a measure of the rate banks charge one another for large loans, declined 16 basis points to 3.03%. Overnight Libor dropped 33 basis points to 0.41%.
Across the seas, European exchanges were gaining ground, as the FTSE in London and the Dax in Frankfurt were trading higher. As for
, Japan's Nikkei and Hong Kong's Hang Seng closed on the downside.