Markets end wild week on upswing

NEW YORK - The wildest week in Wall Street history ended Friday with a second day of gains. The Dow Jones industrial average finished up 125 points. (The Nasdaq and S&P 500 also finished higher.)

Most other times, that would have been a fairly big day. By this week's standards, it was a sleeper: Friday capped a week when the blue-chip index had four 400-point swings in a row for the first time in its 115-year history.

Trading was frantic across financial markets all week. The yield on the 10-year Treasury note hit a record low. Gold briefly topped $1,800 per ounce. Nearly every one of the stocks that make up the Standard & Poor's 500 index ended down midweek.

"It was a sharp and violent week in the stock market, but it's my sense that the worst is over," said Michael Kaufler, a portfolio manager at Federated Investors Inc.

To every scrap of news and each whispered rumor, investors reacted. A credit downgrade for the United States. Concerns about European bank solvency. Fears of a new recession. Word that the Federal Reserve would keep interest rates low for two more years because of slowing growth. Better unemployment news.

The Dow plummeted 634 points Monday, its sixth-worst point drop ever, as investors responded to S&P's withdrawal of the country's "AAA" credit rating, the first downgrade of U.S. government debt ever.

The Dow rose 429 points Tuesday, only to plunge 519 points Wednesday. It surged 423 points Thursday after a better-than-expected drop in new applications for unemployment benefits.

A rebound in retail sales in July pushed the stock market higher Friday as traders looked past a Reuters/University of Michigan measure of consumer sentiment that fell to a 30-year low.

Typically, such a bad consumer survey would have pushed shares sharply lower, said Quincy Krosby, an investment strategist with Prudential Financial. "But these are not normal times."