Stocks finished higher Friday in a highly volatile week, with the Dow logging its first two-day rally since early July. Despite the wild market swings in the last several days, all three major averages are down less than 2 percent for the week.
The Dow Jones Industrial Average rallied 125.71 points, or 1.13 percent, to finish at 11,269.02—logging its first two-day rally since Jul. 6-7.
The blue-chip index had alternated between sharp gains and losses in the last seven sessions and the point swings experienced this week is similar to the week of Lehman’s bankruptcy in 2008.
The S&P 500 gained 6.17 points, or 0.53 percent, to end at 1,178.81. The Nasdaq rose 15.30 points, or 0.61 percent, to close at 2,507.98.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, closed near 36.
For the week, the Dow slid 1.53 percent, the S&P shed 1.72 percent, while the Nasdaq declined 0.96 percent. Cisco was the biggest gainer on the blue-chip index for the week, while BofA plunged.
Techs were the biggest sector laggards this week, while materials gained.
"Obviously the volatility will calm down over the next couple of weeks," said Brad Sorensen, director of market and sector research at Charles Schwab. "We've gotten past a lot of the uncertainty but there's still the European situation that's hanging out there. It's kind of stabilized right now, but whether it blows up again over the weekend is yet to be seen."
European shares closed higher, led by the banking sector, following the short-selling ban on financial shares by France, Italy, Spain and Belgium. (Read More: Why Banning Short-Selling 'Doesn't Do Any Good')
Meanwhile, French President Nicolas Sarkozy and German Chancellor Angela Merkel are scheduled to meet next weekto discuss issues in the the euro zone and as investors snapped up beaten-down sectors.
“Europe’s still what’s controlling this market and I’m deeply concerned,” said Todd Schoenberger, managing director at LandColt Trading. “The threat we had with France losing its AAA credit and the SocGen rumor—these are all rumors, but they have a tendency to solidify as we get closer to the weekend…I would not be shocked to see a selloff this afternoon.”