NEW YORK — A sharp rebound in bank shares and easing worries about the economy pushed stocks to their best week since late November.
The market shot up in one week as it might in some years, with major indicators chalking up gains of about 10 percent.
Friday’s gains were modest compared with the rallies Tuesday and Thursday, but investors welcomed the market’s ability to hold its ground. Several recent rallies have ended with disappointing selloffs.
Fears eased during the week that the nation’s major financial institutions would collapse or at least require additional government lifelines to stay alive. Market veterans were quick to rein in hopes that stocks would chart an easy recovery, but many still saw the four straight days of gains as a good sign.
“The overriding question people have is ‘Is this rally it?’ ” said Quincy Krosby, chief investment strategist at The Hartford.
“For that to happen, I think we need to see more evidence of a turnaround. We still have significant problems in terms of unemployment. The problems with the banks are still there.”
On Friday, the Dow Jones industrial average rose 53.92, or 0.8 percent, to 7,223.98. The Dow hadn’t put up four straight gains since late November.
The Standard & Poor’s 500 index rose 5.81, or 0.8 percent, to 756.55. The Nasdaq composite index rose 5.40, or 0.4 percent, to 1,431.50.
For the week, the Dow jumped 9 percent, the S&P 500 index added 10.7 percent and the Nasdaq rose 10.6 percent. It was the best week for the major indexes since the week ended Nov. 28.
Still lagging about 50%
But the Dow and the S&P 500 index remain down by about half from their peak in October 2007.
The Dow Jones Wilshire 5000 index, which reflects nearly all stocks traded in America, jumped 10.7 percent for the week. That’s a paper gain of about $900 billion.
The turnaround began Tuesday as the head of Citigroup Inc. said the bank managed to turn a profit in the first two months of the year. That helped ease worries about bad debt that have cloaked financial stocks since the collapse of Leh man Brothers in September.
Traders who last week pounded Citi shares to $1 began buying the stock again. The gains in the beaten-down industry were enormous: Citi surged 73 percent for the week, Bank of America Corp. jumped 83 percent, and Wells Fargo & Co. rose 62 percent.
Analysts said technical factors that helped drive the market for the week continued Friday, including short-covering, when traders buy stock to cover their short-sale trades.
