Dow, S&P gain on bailout hopes, Nasdaq slips

NEW YORK - Stocks ended mostly higher on Friday as big bank shares staged a late rally on hopes lawmakers would hammer out an agreement on a US$700 billion financial-sector rescue plan this weekend.

But tech shares took it on the chin, keeping the Nasdaq in the red, after a disappointing outlook from BlackBerry maker Research in Motion. considered a bellwether for the sector.

Friday's market gains were in sharp contrast to the rest of the week, which was the worst for the benchmark S&P 500 since May.

Trading volume was light, with most traders glued to the increasingly acrimonious debate in Washington over Treasury's plan to mop up bad mortgage debt from bank balance sheets to get them lending again.

Shares of JPMorgan Chase, up 11 per cent and Bank of America, up nearly 7 per cent, ranked among the top gainers in both the Dow and the S&P 500. An S&P index of financial shares rose 3.2 per cent.

The Dow Jones industrial average was up 121.07 points, or 1.10 per cent, at 11,143.13. The Standard & Poor's 500 Index was up 4.09 points, or 0.34 per cent, at 1,213.27. But the Nasdaq Composite Index was down 3.23 points, or 0.15 per cent, at 2,183.34.

The fate of the rescue plan pushed nearly everything else to the background on Friday, including US bank regulators' move to close Washington Mutual late on Thursday, the largest US bank failure in history.

Source: Singapore Business Times - 27 Sep 2008