The Dow and S&P 500 rose on Friday after the government's stress tests results on big banks lifted optimism on financial stocks, and data showed employers cut a smaller-than-expected amount of jobs in April.
But the Nasdaq fell slightly on a slide in chipmakers and other technology bellwethers, including Apple Inc
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 firms 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.
The 539,000 job cuts 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.
They were assuming some very aggressive, sort of draconian, scenarios, and with things appearing to be a little on the mend maybe we might not see things get that bad, said Kevin Kruszenski, head of Listed Trading at KeyBanc Capital Markets in Cleveland.
At some point the banks are going to work again.
The Dow Jones industrial average <.DJI> gained 75.83 points, or 0.90 percent, to 8,485.68. The Standard & Poor's 500 Index <.SPX> added 8.34 points, or 0.92 percent, to 915.73. The Nasdaq Composite Index <.IXIC> dropped 0.90 points, or 0.05 percent, to 1,715.34.
Shares of several major banks rose, with JPMorgan Chase Inc
The KBW Bank index <.BKX> jumped 5.4 percent.
Bank of America Chief Executive Kenneth Lewis said in an interview on CNBC that 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.
A rise in crude oil rose to nearly $58 a barrel lifted energy shares, as Chevron
Even with the slight decline, the Nasdaq remains on pace for its ninth straight weekly advance, the longest such streak for the index since an 11-week advance at the end of 1999.
Since hitting a 12-year closing low in March, the S&P has surged 35 percent, driven by optimism about the financial systems's condition and hopes the recession may be waning.
(Reporting by Chuck Mikolajczak, additional reporting by Ryan Vlastelica; Editing by Padraic Cassidy)