Stocks finish higher as credit market worries ease

NEW YORK – Wall Street twisted its way through another difficult session Friday, discouraged about the economy’s prospects but still managing a higher finish after some concerns about the beleaguered financial sector lifted late in the session.

Word shortly before the close that Citigroup Inc.’s board plans to meet in an emergency session over the weekend helped that stock and other financials pare sharp losses.

Friday’s session ended a week that was made turbulent not only by bad news from the financial sector but also by spiking commodity prices and comments from the Federal Reserve that it might be less generous with interest rate cuts in the coming months. A highly anticipated Labor Department report showing employers added 166,000 jobs in October – the most in five months and nearly double what analysts had been expecting – didn’t give stocks much of a lift a day after a sharp pullback as investors’ unease about the financial sector seemed to blanket trading.

Wall Street was clearly still shaky after Thursday’s sharp pullback, which took the Dow down more than 360 points – the fourth biggest drop of the year. The market has been mercurial lately, with economic data coming in mixed and the possibility of interest rate cuts ending, and Friday’s trading saw the major indexes alternating between gains and losses.

“I think there is a lot of uncertainty in the markets about the financial institutions in particular,” said Subodh Kumar, global investment strategist at Subodh Kumar & Assoc. in Toronto. “This market will remain volatile until these issues are resolved or until it’s had a full 10 percent correction,” he said, referring to unease about the extent of write-downs of soured debt.

According to preliminary calculations, the Dow rose 27.23, or 0.20 percent, to 13,595.10 after being down more than 120 points earlier in the session and fluctuating between gains and losses.

Broader stock indicators also closed higher. The Standard & Poor’s 500 index rose 1.21, or 0.08 percent, to 1,509.65, while the Nasdaq composite index rose 15.55, or 0.56 percent, to 2,810.38.

Bond prices rose as investors pulled more money out of stocks. The yield on the 10-year Treasury note, which moves opposite the price, fell to 4.32 percent from 4.35 percent late Thursday.

Oil prices rebounded on the New York Mercantile Exchange, after dropping sharply Thursday. Prices have been exceptionally volatile in recent days as the market treads through record territory. A barrel of oil jumped $2.44 to $95.93.

The dollar traded mostly lower against other major currencies. The euro bought a record $1.4527 on Friday.

The biggest losers in the stock market Friday, as they have been in the past few months, were financial institutions – including Merrill Lynch & Co., Washington Mutual Inc., Goldman Sachs Group Inc. and JPMorgan Chase & Co. Several analysts have issued research notes in recent days expressing concern about banks’ and brokerages’ exposure to the tight credit markets and the likelihood that further write-downs are in the offing.