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U.S. MARKETS BOUNCE BACK

Associated Press

NEW YORK - The stock market bounced back Friday, a day after suffering its second-worst loss this year. Bank of America, JPMorgan Chase and other big lenders posted solid gains even though many of them had their credit ratings cut the day before.

Analysts said the downgrades from Moody's Investor Service late Thursday had been expected for months and removed some of the uncertainty that had been weighing on bank stocks.

"It's been like a cloud over the sector," said Brian Gendreau, market strategist with the broker Cetera Financial. "And look at who's going up: bank stocks. There are obviously some people who thought it would be much worse."

The Dow Jones Industrial Average gained 67.21 points to close at 12,640.78. The Standard & Poor's 500 index rose 9.51 points to 1,335.02, and the Nasdaq composite index climbed 33.33 points to 2,892.42. The gains turned the Nasdaq positive for the week. The Dow and S&P 500 finished the week lower, their first week of losses since June 1. The biggest drop of the week came Thursday, when a trio of weak manufacturing reports stirred fears about the global economy. The Dow lost nearly 251 points, its second-steepest fall this year. The worst was June 1, after a dismal U.S. jobs report rattled markets.

Even with two days of deep losses, the S&P 500 is still up 1.9 percent this month. To Gendreau, it looks like investors have been overreacting to recent economic reports. "The market is getting jerked around," he said. "The economic data point to a softening economy, but we've had a softening economy for three years now."

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