Wall Street finished a tumultuous week on an upbeat note Friday, with stocks posting a solid advance and raising hopes that after more than two months of selling, the worst of the market's decline might be over. The gain helped the Dow Jones industrials achieve their biggest weekly advance in 10 weeks.
"We are starting to get investor interest back into the marketplace," said Arthur Hogan, chief market analyst at Jefferies & Co.
The week, which saw the Dow make its second largest one-day point gain, also marked the first time since July 1-5 that the Dow, the Nasdaq composite index and the Standard & Poor's 500 index all had two winning sessions.
The Dow closed up 78.08, or nearly 1 percent, at 8,264.39. The blue chips ended the week up 3.1 percent, their best showing since they rose 4.2 percent the week of May 17.
They also moved back above their Sept. 21 level of 8,235.81, the Dow's closing low following the terrorist attacks. The average first closed below that level on July 18.
The market's other major indexes also advanced Friday. The Nasdaq rose 22.04, or 1.8 percent, to 1,262.12. The S&P 500 advanced 14.16, or 1.7 percent, 852.84.
But the week was mixed for the broad market with the Nasdaq falling 4.3 percent and the S&P 500 rising 0.6 percent. The three indexes have not all had a weekly gain since May 17.
The Nasdaq and S&P 500 remain well below their Sept. 21 lows.
Prices fluctuated during the session, as they had all week long. But a significant change was the fact that the major indexes turned higher in late afternoon _ the opposite of their pattern over the past few weeks, when they gave up fragile gains and closed lower.
Analysts think both individual and institutional investors are beginning to feel more at ease after driving prices to five-year lows over the past 10 weeks.
"There is a belief that there is a near-term bottom in place and that has bolstered some confidence," said Jeff Kleintop, chief investment strategist for PNC Financial Services Group in Philadelphia.
Analysts said the lower prices are going to be the biggest factor in getting investors back into the market. But, at the same time, the buying won't be long-lasting unless investors' confidence in corporate bookkeeping is restored.
Substantial progress toward rebuilding sentiment was made Wednesday when executives from Adelphia Communications were arrested for allegedly looting the company. And House and Senate negotiators agreed Wednesday on legislation that would create tougher penalties for corporate fraud. The Dow soared 488 points, its second biggest one-day point gain.
Largely satisfactory second-quarter earnings also lent support to the market.
"All of that is part of the process that instills confidence back in the system," Hogan said. "It feels like we are at a juncture where people want to get back into the game."