NEW YORK (Reuters) - U.S. stocks rose on Friday, and the Nasdaq capped its longest stretch of weekly gains in a decade as stress test results and reassuring jobs data fueled hopes the worst is over for banks and the economy.
Financial shares led a broad run-up again, a day after regulators said most U.S. banks were sound. The KBW Bank index .BKX surged 12.1 percent.
Shares of No. 2 U.S. bank JPMorgan Chase Inc (JPM.N) climbed 10.5 percent to $38.94, making the stock the Dow’s top gainer. A 3.4 percent gain in oil prices above $58 a barrel bolstered energy companies’ shares, led by Chevron Corp (CVX.N), which rose 3.5 percent to $70.38.
The release of the stress test results “has given people a little bit of confidence that the government can help to solve this part of the financial crisis,” said Richard Sparks, senior equities analyst and options trader at Schaeffer’s Investment Research in Cincinnati.
“There’s a sense that the government actually has a logical plan ... even if things got worse, these companies will be able to survive. That helps bolster confidence in the administration.”
The Dow Jones industrial average .DJI gained 164.80 points, or 1.96 percent, to 8,574.65. The Standard & Poor's 500 Index .SPX rose 21.84 points, or 2.41 percent, to 929.23. The Nasdaq Composite Index .IXIC climbed 22.76 points, or 1.33 percent, to 1,739.00.
For the week, the Dow rose 4.4 percent and the S&P 500 gained 5.9 percent, while the Nasdaq jumped 1.2 percent.
The Nasdaq registered its ninth straight weekly advance, the longest such streak for the index since an 11-week climb in December 1999. Since hitting a 12-year closing low in March, the S&P has surged 37.4 percent, but it is still down 40 percent from its record of October 2007.
Shares of Wells Fargo (WFC.N) jumped 13.8 percent to $28.18 and shares of Bank of America (BAC.N) , the largest U.S. bank, gained 4.9 percent to $14.17, while Citigroup (C.N) climbed 5.5 percent to $4.02.
U.S. regulators told top banks after the close on Thursday to raise $74.6 billion to build a capital cushion that officials hope will restore faith in financial companies and set a course out of the deepest recession in decades.
Several of the large banks have announced equity and debt offerings in an attempt to raise capital.
Bank of America Chief Executive Kenneth Lewis said in an interview on CNBC he anticipates about $10 billion in asset sales and that he is “pretty confident” the bank will do better than the stress test results indicate. Regulators told his bank it needed $33.9 billion of fresh capital.
The 539,000 jobs cut by employers in April was the smallest reduction since October, and hinted at some improvement in the labor market, but the unemployment rate soared to 8.9 percent, the highest since September 1983.
Sanford C. Bernstein, a brokerage, raised its price target on Google’s stock to $600. Activision, the video-game maker, posted quarterly results that topped Wall Street’s estimates and raised its 2009 forecast.
Hopes of an economic recovery pushed U.S. front-month crude up $1.92, or 3.4 percent, to settle at $58.63 a barrel, and gave investors a reason to buy energy shares. Exxon Mobil (XOM.N) shares added 2.7 percent to $70.80.
Trading volume was active on the New York Stock Exchange, with about 1.90 billion shares changing hands, above last year’s estimated daily average volume of 1.49 billion, while on Nasdaq, about 3.18 billion shares traded, also well above last year’s daily average of 2.28 billion.
Advancing stocks outnumbered declining ones by 2,645 to 431 on the NYSE, and by 2,049 to 681 on Nasdaq.
Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal