By Kate Gibson, MarketWatch
NEW YORK (MarketWatch) -- U.S. stocks rose Friday, rebounding
from the second-worst hit this year, as the European Central Bank
said it would take further steps to ease loans collateral for
banks.
"I think we're coming off yesterday's plunge. We didn't know
what we didn't know, and now that we know who was downgraded, it
wasn't so bad," Jack Ablin, chief investment officer at Harris
Private Bank, said of the downgrade late Thursday by Moody's
Investors Service of 15 global banks. None were cut more than the
ratings agency had projected.
The Dow Jones Industrial Average (DJI) rose 54.14 points, or
0.4%, to 12,627.69.
The S&P 500 index (SPX) rose 4.45 points, or 0.3%, to
1,329.96, with financial companies leading the gains and
natural-resource companies hardest hit.
Morgan Stanley (MS) rose 1.7% after Moody's cut its rating by
two levels, less than the three threatened. Also rising were Bank
of America Corp. (BAC) and Citigroup Inc. (C), both of which were
cut to within two notches of junk.
The Nasdaq Composite (RIXF) advanced 13.24 points, or 0.5%, to
2,872.33.
Shares of Facebook Inc. (FB) rose 2.7% after Nomura Holdings
Inc. advised buying the social-networking company.
For every two stocks falling nearly three rose on the New York
Stock Exchange. As of 10:55 a.m. Eastern time, 168 million shares
had traded.
The ECB said it would ease rules on the collateral banks can
offer for central bank funds. And, Bloomberg News cited a person
familiar with the plan as saying Spain was considering making
investors holding bank equity and debt to take the losses in a
restructuring.
"First you hear a lot of good strong talk, until the market
doesn't want to hear it anymore, then you get a lot of monetary
policy, until the market doesn't want to hear it anymore," said
Ablin, who likens the scenario in the European Union to the
U.S.
"In Europe, it's up to Germany, here's it's up to Congress,"
said Ablin of the longer-term fixes needed to bolster the global
economy.
Spain's finance minister on Friday confirmed the government
would formally ask for aid for its banks on Monday. An independent
audit of Spain's banking sector released Thursday found Spain could
need as much as $80 billion to recapitalize its banks.
On Thursday, U.S. equities took their second-hardest knock so
far this year on signs of a slowdown in global manufacturing.