The Dow Jones industrial average closed up 152.16, or 2 percent, at 7,784.69, in a day marked by wide swings. The Dow was off more than 100 points in morning trading.On the week, the Dow fell 244.08 points, or 3.0 percent, after three winning weeks in a row.
On the year, the Dow is off 123.56 points, or 1.6 percent, following gains of 33 percent, 26 percent, and 22 percent, in 1995, 1996, and 1997, respectively.
"Stocks are still not reacting well to bad news," said Peter Green, technical strategist at Gruntal & Co. "In the very near-term, it looks like the Dow's Sept. 1 low of 7,400.30 will hold, but I think the upside is limited."
Morning comments by President Clinton encouraged traders Friday.
The president, speaking to reporters, said the U.S. should seize the initiative in restoring order to the global economy. He said he has ordered the U.S. Export-Import Bank to offer short-term credit to bolster U.S. commerce in Latin America.
"We don't have to have a worldwide recession," Clinton said.
"There's a rumor that's making the rounds that the U.S. will, with the participation of others, come up with some type of credit facility for the emerging markets," said Joseph LaVorgna, vice president and financial market economist at Deutsche Bank.
Clinton's words only added fuel to the speculation.
Later Friday, U.S. Treasury Secretary Robert Rubin said the thrust of Saturday's conference of finance ministers and central bankers from the Group of Seven industrialized nations will be "largely on Japan" and added that the U.S. stance on the dollar is unchanged.
But Rubin stopped short of providing details or even the existence of a wide-ranging plan to shore up emerging-market economies.
On Monday, the International Monetary Fund and World Bank will also hold meetings.
Volume was very heavy, a market positive.
Last week's rescue of hedge fund Long-Term Capital anagement from the edge of collapse by a group of financial concerns has kept investors worried about the extent of other funds' trading losses on banks and brokerages.
Some participants wondered whether banks' exposure to hedge funds might result in a credit crunch similar to that of the early 90's.
On Friday, another major hedge fund, Omega Advisors, stepped forward to quell speculation that it was on the brink of shutting down. "Nothing could be further from the truth," Chairman Leon Cooperman said in a statement.
Meanwhile, on the economic front, the government reported that 69,000 new nonfarm jobs were added to the nation's payrolls in September, the weakest showing since January 1996.
In addition, the unemployment rate edged up to 4.6 percent from August's 4.5 percent.
The data reinforced the markets' perception that U.S. economic growth is ebbing, and strengthened the notion that the Federal Reserve will have to lower short-term interest rates further in the months ahead.
Technology sector idled after two days of fierce liquidation, but Internet-related shares snapped back from their two-day drubbing as volume escalated. The hard-hit financial sector also bulled higher, led by the bank group, which had lost about 30 percent from its July high.
Retailers and oil industry shares also traded higher.
In Friday's market indicators:
- The Standard & Poor's 500 Index rose 1.6 percent.
- New York Stock Exchange winners topped losers by 17 to 13.
- On the Big Board floor, turnover rose 1 percent to 903 million shares.
- The Nasdaq Composite gained 0.2 percent. Declining issues led advancers by 21 to 19 in the Nasdaq Stock Market. Volume totaled 860 million shares.
- The Russell 2000 Index of small-company stocks sank 0.1 percent.
- In the bond market, the 30-year Treasury rose 19/32, to yield 4.843 percent.
Among the stocks in the news Friday: