NDAQ Nasdaq Inc

By Joseph Adinolfi and Sara Sjolin, MarketWatch

U.S. shares still on track to finish with weekly loss

U.S. stocks vaulted sharply higher Friday afternoon, led by a rebound in battered bank and energy stocks.

Advances in shares of J.P. Morgan Chase (JPM) and Goldman Sachs Group (GS) were contributing more than 40 points to the Dow Jones Industrial Average, after Deutsche Bank AG calmed nervous investors by announcing that it would repurchase (http://www.wsj.com/articles/deutsche-bank-to-buy-back-5-4-billion-in-debt-securities-1455284761) $5.4 billion of its senior unsecured debt, analysts said.

"[Banks] are in much better shape than the market is interpreting at this stage," said Oliver Pursche, chief executive officer of Bruderman Brothers.

Adding to upswing were sharp gains in West Texas Intermediate crude , soaring more than 10%, while Brent crude prices jumped 8%.

The Dow Jones Industrial Average climbed 254 points, or 1.6%, to 15,913, while the S&P 500 index gained 29 points, or 1.6%, to 1,858. Financial shares were up 3.5%, making it the best-performing sector on the S&P, followed by energy shares, up 2.3%. Every sector except for utilities was in the green.

Meanwhile, the Nasdaq Composite (NDAQ) rose 61 points, or 1.4%, to 4,328.

Pursche said Friday's recovery was a repudiation of excessive pessimism after a brutal week of trading. "Market sentiment has gotten so bearish that it's just overdone," he said.

Stocks also benefited from a strong reading on consumer spending. Retail sales rose 0.2% in January (http://www.marketwatch.com/story/retail-sales-increase-02-in-january-2016-02-12), beating expectations for a 0.1% increase from a survey of economists polled by MarketWatch, while the decline in growth initially reported for December was revised higher, from minus 0.1% to 0.2%.

The retail-sales figures suggest consumer confidence is on the rise despite the recent volatility in global stock markets.

"We've been witnessing a steady increase in consumer confidence against a backdrop of doom and gloom," said Jack Albin, chief investment officer at BMO Private Bank.

Stocks had an initial negative reaction to a survey from the University of Michigan (http://www.marketwatch.com/story/consumer-sentiment-weakens-in-february-university-of-michigan-says-2016-02-12) showed consumer sentiment has softened in February, largely due to a drop in its expectations component.

Despite Friday's gains, U.S. stocks will likely finish the week in the red after Thursday's sharp selloff, when Dow industrials ended at a two-year low (http://www.marketwatch.com/story/dow-futures-sink-more-than-200-points-as-global-rout-gains-pace-2016-02-11) and the S&P 500 index closed at its weakest level since April 2014.

Read: Here are 5 signs we might already be in a bear market (http://www.marketwatch.com/story/here-are-5-signs-we-might-already-be-in-a-bear-market-2016-02-11)

A recovery in oil prices helped boost energy shares and boost investors' appetite for risky assets, analysts said. Oil rallied (http://www.marketwatch.com/story/oil-prices-rally-5-after-more-jawboning-from-opec-members-2016-02-12) after the United Arab Emirates's energy minister said late Thursday that the Organization of the Petroleum Producing Countries was ready to cooperate on production cuts.

Other Markets: In Europe, markets also rallied (http://www.marketwatch.com/story/european-stocks-finding-relief-but-weekly-slide-appears-intact-2016-02-12), with the Stoxx Europe 600 index rebounding after falling to a two-year low. The sentiment was more downbeat in Asia, where Japan's Nikkei 225 index slumped 4.8% to end with the worst weekly drop since 2008 (http://www.marketwatch.com/story/japan-stocks-plunge-to-lowest-point-in-more-than-a-year-2016-02-11).

Gold gave up some gains (http://www.marketwatch.com/story/gold-prices-slip-as-investors-embrace-risk-assets-2016-02-12)after it jumped to its highest finish in a year (http://www.marketwatch.com/story/gold-jumps-to-1-year-high-as-global-market-rout-spurs-safe-haven-buying-2016-02-11) on Thursday. The dollar advanced against the euro and the yen .

Fed: New York Fed President William Dudley said the U.S. economy is well-suited to absorb any shocks that might come along during a speech on household borrowing and indebtedness.

Read: Have central banks lost market credibility? (http://www.marketwatch.com/story/is-this-the-week-central-banks-lost-their-market-credibility-2016-02-11)

Movers and shakers: Shares of J.P. Morgan Chase & Co. climbed after CEO Jamie Dimon bought 500,000 of his bank's shares for $26 million (http://www.marketwatch.com/story/ceo-jamie-dimon-bets-on-jp-morgan-chase-to-the-tune-of-26-million-2016-02-11) on Thursday. The purchase is meant to stem the negative sentiment clobbering bank stocks this year.

Groupon Inc.(GRPN) leapt more than 20% after it beat expectations (http://www.marketwatch.com/story/groupon-swings-to-loss-results-beat-projections-2016-02-11) late Thursday.

Pandora Media Inc.(P) rose Friday after falling Thursday as investors disapproved of plans to invest in an on-demand music service (http://www.marketwatch.com/story/pandoras-spending-plans-dismay-investors-2016-02-11).

(END) Dow Jones Newswires

February 12, 2016 11:36 ET (16:36 GMT)

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