Stocks continue sharp rally on rescue plan hopes; Dow up 369

— -- Stocks soared for the second consecutive day Friday to close out one of the most tumultuous weeks in the 216-year history of Wall Street as investors scrambled back into the markets on faith that the unprecedented moves by the government will shore up the financial system.

The Dow Jones industrial average surged 368.75 points, or 3.4%, to close Friday at 11,388.44, adding to Thursday's 410-point advance, to bring the two-day gain to almost 780 points.

You would never have known it from the anxiety that gripped Wall Street and Washington, but stocks ended the week virtually unchanged, with the Dow Jones industrial average down 33.55 points for the week, or 0.3%.

Investors saw a massive loss Monday, a rebound on Tuesday, another large drop Wednesday, and the rally on Thursday and Friday. The Dow has logged moves of more than 400 points every day except Tuesday.

Broader stock indicators actually closed higher for the week. The Standard & Poor's 500 index rose 48.57, or 4.0%, to 1,255.08, and the Nasdaq composite index rose 74.80, or 3.4%, to 2,273.90.

For the week, the S&P 500 rose 0.3% and the Nasdaq added 0.6%.

The late week rally was spurred by investors hoping the plan to rescue the financial system by quarantining the bad loans would finally allow analysts to assess the size of the problem.

Treasury Secretary Henry Paulson, speaking about the rescue plan said a bold approach is needed to remove troubled assets from the books of financial firms. He offered few details, but said he would work on it through the weekend with congressional leaders.

Meanwhile, the Securities and Exchange Commission announced it was temporarily banning short selling 799 financial institutions' stocks. Short sellers, who bet on falling share prices by borrowing the shares and selling them, have been blamed as one factor for the rapidly declining value of bank and brokerage stocks.

"The relief is justified," says Alan Skrainka, strategist at Edward Jones. "This is really what everyone was waiting for. These assets are worth something. The federal government is the ultimate back stop."