NEW YORK — U.S. stocks rocketed higher Friday, with the major stock indexes wiping out a week of shattering losses, as Wall Street cheered the government’s moves to kick-start credit markets as well as plans to move against short sellers.
“The world likes what the Federal Reserve is doing right now. The overall market is excited and has more confidence,” said Corey Ribotsky, managing member of the N.I.R. Group.
The Dow Jones industrial average rose 368.75 points to end at 11,388.44, a lapse of 0.3 percent from a week ago.
Of the blue-chip index’s 30 components, 25 posted gains for the session, with the advance led by American International Group Inc., up 43.1 percent.
Major AIG shareholders were said to be pursuing a bid to pay off the federal government’s loan in time to avoid Uncle Sam from taking an 80 percent stake in the insurance giant.
Citigroup Inc. also bolstered the Dow, up 24 percent, followed by Bank of America Corp., which gained 22.6 percent.
The S&P 500 Index gained 48.57 points to finish at 1,255.08, a gain of 0.3 percent from the previous Friday’s close.
The technology-laden Nasdaq composite index jumped 74.80 points to end at 2,273.90, giving it a 0.6 percent rise for the week.
Early on, the major stock indexes had climbed above the level at which they stood before the start of the watershed week, which saw the Dow Jones industrial average lose about 800 points in the first three days of trading.
“Panic buyers, most likely the shorts, were willing to pay any price, and they sure did,” said Elliot Spar, option-market strategist at Stifel Nicolaus & Co., describing the burst higher, especially among financial shares.
But it’s too soon to say whether the market has bottomed out, according to Ribotsky.
“We have to wait and see what comes out of the whole proposal and package. We’ll see what else transpires over the weekend.”
Trading volume proved heavy, with nearly 3 billion shares exchanged on the New York Stock Exchange, and advancers beating decliners roughly 7 to 1. On the Nasdaq, more than 2 billion shares traded, and for every stock on the decline, four advanced.
All of the S&P’s 10 industry groups advanced, with the financial and energy sectors leading the charge, the former up 15 percent and the latter gaining 8.1 percent.
Financials rallied, with shares of Lehman Brothers Holdings Inc. climbing 16 cents, or 313.7 percent, to 22 cents a share.
Shares of Goldman Sachs Group rose 20.2 percent, and Morgan Stanley gained 20.7 percent.
“Just like a child wishing for a Wii or an Xbox on Christmas Day, the market was hoping for some sort of RTC (Resolution Trust Corp.) type of arrangement, and there it was underneath the Christmas tree,” said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank.
