After all the hoopla this week, the Dow ended at 11,388.44, which is pretty much where it left off last Friday. The blue chip index advanced by 368.75 points, or 3.35%, for the day.

Broader indexes also ended higher Friday. The S&P 500 index increased 48.57 points, or 4.03%, to 1,255.08, and the Nasdaq gained 74.80 points, or 3.40%, closing at 2,273.90.

TodayÂ’s rally was fueled by the governmentÂ’s announcement that it will step in to help rescue banks from bad bets on mortgages. Treasury Secretary Henry Paulson explained that a bailout is necessary though he offered little in terms of specifics. Paulson said that he will meet with members of congress over the weekend to hammer out the details.

The government announced other actions as well in order to help facilitate a less turbulent environment in the financial system. The Federal Reserve will expand its emergency lending program, allowing commercial banks to finance purchases of asset-backed paper from money market funds.

The central bank also infused another $20 billion in temporary reserves into the U.S. financial structure. Additionally, the Fed plans on buying short-term debt obligations that are issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

Covering of short positions also played a role in todayÂ’s bullishness. The U.S. Securities and Exchange Commission announced a temporary ban on short selling of 799 financial companies. The intent behind this move is to help stabilize the plummeting shares in the financial arena. As a result, some investors scrambled to cover short positions, which translated into share price gains.

Oil joined in on FridayÂ’s rally. Light, sweet crude for October delivery jumped $6.67, settling at $104.55 per barrel on the New York Mercantile Exchange. Gold, however, did not take part in the rally. The precious metal settled nearly 3.6% lower for the day.

The Focus List

Focus List holdings benefited from todayÂ’s upswing. The portfolio ended FridayÂ’s session 2.87% higher. Several holdings staged wide advances, while very few moved down.

Some of the bigger gainers included FPL Group Inc. (FPL), which was the subject of an analysts upgrade today. Shares of the electric utility company closed 6.33% higher.

Westinghouse Air Brake Technologies Corp. (WAB) saw the largest share price increase, rising 9.5% Friday. No major news was released on WAB. However, analyst earnings estimates for the 2009 year were increased by 4 cents to $3.08 per share over the past 7 trading days.

Watson Wyatt Worldwide Inc. (WW) declared a regular quarterly dividend of 7.5 cents per share. The company noted that the dividend is payable Oct. 15 to shareholders of record Sept. 30.

“WW” Free Stock Analysis: Buy? Sell? Hold?
“WAB” Free Stock Analysis: Buy? Sell? Hold?
“FPL” Free Stock Analysis: Buy? Sell? Hold?
Zacks Investment Research

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