Regional bank stocks surge on government's moves

Some of the sector's biggest gainers included Regions Financial Corp., which jumped $1.92, or 13.2 percent, to $16.52, and National City Corp., which advanced 70 cents, or 15.9 percent, to $5.10.

Elsewhere, Marshall & Ilsley Corp. rallied $1.42, or 6.2 percent, to $24.40, and Zions Bancorp rose $4.52, or 10 percent, to $49.74.

Comerica Inc. advanced $2.07, or 5.7 percent, to $38.65. KeyCorp gained 80 cents, or 6.1 percent, to $13.99.

Treasury Secretary Henry Paulson said early Friday that he will work through the weekend to finalize the details of a plan designed to help banks remove toxic assets from their books.

The Securities and Exchange Commission, meanwhile, enacted a temporary ban on the short selling--or placing of bets that a stock will fall--of nearly 800 financial stocks.

Additionally, the Federal Reserve said it will expand its emergency lending and let commercial banks finance purchases of asset-backed paper from money market funds. The Fed will also buy short-term debt obligations issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

And after a shake-up in money markets, the Treasury Department has decided to use a Depression-era fund to provide guarantees for U.S. money market mutual funds. Money market mutual funds have historically been considered safe bets, but investors frantically began pulling money from the funds this week, worried about possible exposure to troubled financial firms.

Investors are hopeful that the government's many efforts will help alleviate some of the upheaval in the markets as of late. This week alone saw the demise of Lehman Brothers Holdings Inc., which filed for bankruptcy protection, and Merrill Lynch & Co., which was scooped up by Bank of America Corp. in an emergency sale. The government was also forced to step in and rescue American International Group Inc., the nation's largest insurer.