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Updated from 7:12 a.m. EDT

Premarket futures were indicating an exuberant open for U.S. stocks Friday following reports that the government was creating a sweeping fix for the financial crisis. A moratorium on short-selling by the

Securities and Exchange Commission

also contributed to the rosy outlook.

Futures for the

S&P 500

were up 50 points at 1253 and were 44 points above fair value.


futures were up 68 points to 1776 and were 67 points better than fair value.

Financial stocks were set to skyrocket. In premarket trading, names including

Washington Mutual

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(WB) - Get Weibo Corp Sponsored ADR Class A Report



(C) - Get Citigroup Inc. Report


Morgan Stanley

(MS) - Get Morgan Stanley (MS) Report

were all showing sizable double-digit gains.

During Thursday's volatile session, the major indices swung back and forth before rallying sharply in the afternoon. The

Dow Jones Industrial Average

traded in a 617-point range before gaining 410 points, or 3.9%. The S&P 500 and Nasdaq added 4.3% and 4.8%, respectively.

The late gains came on a


report that the Treasury Department was formulating an entity that would remove bad debt from companies' balance sheets. The plan includes a possible $800 billion fund to buy bad debt from troubled financial firms.

Early Friday, the Treasury said it would offer $50 billion to insure

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mutual funds. A number of such funds have lately been under fire thanks to investment in bad debt from bankrupt

Lehman Brothers

and flailing insurer


(AIG) - Get American International Group, Inc. Report


The SEC, meanwhile,

banned short-selling

of 799 financial stocks, effective immediately. The temporary crackdown will remain in place until Oct. 2. The U.K.'s financial regulator also banned short sales of 29 of its publicly traded companies. Short-selling, or making a bet that a given stock's price will fall, has been a source of heated controversy as some have speculated that short-sellers are responsible for the decline of

Bear Stearns


Lehman Brothers


Elsewhere in the financials space, AIG said

Edward Liddy

will succeed Robert Willumstad as chairman and CEO. Willumstad was ousted by Treasury Secretary Henry Paulson as part of a government bailout package for AIG.

Stocks were further buoyed by decent earnings statements in the technology sector. After Thursday's session closed,

software maker Oracle

(ORCL) - Get Oracle Corporation Report

reported rising fiscal first-quarter profits but offered cautious revenue guidance.

Mobile device maker



posted a wider first-quarter loss but still bested Wall Street's estimates.

Looking at commodities, oil was gaining $1.52 to $99.40 a barrel. Gold was giving back $35.90 to $861.10 an ounce after surging more than $110 in the previous two days.

Longer-dated U.S. Treasury securities were declining in price. The 10-year was down 2 points to yield 3.78%, and the 30-year was off 2-16/32, yielding 4.33%. The dollar was making substantial gains on its major foreign competitors.

Overseas, the FTSE in London was up 8.5%, and the DAX in Frankfurt was gaining 4.9%.

Asia stocks

went on a tear. The Nikkei in Japan closed with a gain of 3.8%, and the Hang Seng in Hong Kong jumped 9.6%.