Stocks rebound on 'stress test' details, but Dow snaps 6-week run

NEW YORK -- Investors set aside some of their worries about banks and the economy Friday after the government unveiled its methods for testing the health of banks.

The Federal Reserve report was light on details, but didn't bring any bad news. That cleared the way for the Dow Jones industrial average to rise 119.23, or 1.5%, to 8,076.29.

Broader market measures also jumped. The Standard & Poor's 500 index rose 14.31, or 1.7%, to 866.23, and the Nasdaq composite index rose 42.08, or 2.6%, to 1,694.29.

But for the week, the Dow fell 0.7% and the S&P slid 0.4%,snapping the indexes six-week streak of gains. The Nasdaq rose 1.3% for the week, extending its winning streak to seven straight weeks, its longest string of gains since early May 2007.

Investors were pleased about better-than-expected quarterly results from Ford Motor. Positive news from American Express and Microsoft also energized the market.

The Fed, in outlining the tests' methodology, said the 19 companies that hold one-half of the loans in the U.S. banking system won't be allowed to fail— even if they fared poorly on the stress tests.

Separately, bank executives were being briefed on their test results in meetings across the country. By law, the banks cannot publicize the results without the government's permission, but Wall Street buzzed with anticipation and most financial stocks rose.

"There are no major shocks in here. That's why the market's holding up well," said Scott Fullman, director of derivatives investment strategy for WJB Capital Group. "It's been hanging over the market for the last few days."

The day was not without volatility, however. After the Fed's release, the stock market at times gave up huge chunks of gains before finishing solidly higher. Financial stocks, as they have been all week, were leading the way.

The Dow rose 119.23, or 1.5%, to 8,076.29, after rising by as many as 170 points.

Broader market measures also jumped. The Standard & Poor's 500 index rose 14.31, or 1.7%, to 866.23, and the Nasdaq composite index rose 42.08, or 2.6%, to 1,694.29.