The Dow turned positive Friday as investors were encouraged by words from President Bush and a steady stream of legislators that a bailout deal will get done.
The Dow Jones Industrial Average tumbled about 130 points at the opening bell then clawed it all back, led by JPMorgan and Bank of America as traders passed swift judgment on financials. (Track the Dow winners and losers.)
The S&P 500 and tech-heavy Nasdaq declined as Research In Motion's outlook rattled tech investors.
Bailout talks ended without a deal Thursday night but lawmakers remained under pressure to get a deal done. Congressional leaders will go back to the table today to try and hammer out the deal.
"The legislative process is sometimes not very pretty," Bush said. "But we will rise to the occasion. We are going to get a package passed."
"We're going to get this done — and stay in session long enough to get it done," Senate Majority Leader Harry Reid said.
"The time is now for House Republicans to come to the negotiating table and for presidential politics to leave the negotiating table," Reid said. "The insertion of presidential politics has not been helpful ... It's been harmful," referring to criticism of GOP presidential candidate John McCain that he rushed in to the negotiations only to slow down the process.
The McCain camp announced Friday that he will attend the debate tonight against Democratic nominee Barack Obama.
"I actually think [Congress is] working quite quickly," said Jim Rosenthal, managing director of institutional trading at Ladenburg Thalmann. "The legislative branch of this country does not work in 48 hours ... We're just not used to watching the process," he said. "Legislation usually takes six months and a lot of bickering and fighting."
Still, he remained confident: "Congress will get a deal passed," Rosenthal said.
If the proposed figure of $700 billion was made available it would exceed the total lending by the International Monetary Fund since its inception, according to Reuters, but some analysts say that it still wouldn't be sufficient to unclog the financial arteries.
The credit crunch claimed its biggest victim late Thursday: Washington Mutual . The U.S. shut down the nation's largest savings and loan late Thursday, wiping out its stock. JPMorgan Chase jumped in to snap up the assets and deposits of WaMu for $1.9 billion.
That left investors wondering who might be next.