Stocks rallied to the finish line as the buzz around the market was that a bailout deal could come this weekend and that another bank deal was in the works.
The Dow Jones Industrial Average started the day down more than 100 points, then clawed it all back as traders cherry-picked bank stocks. In the last half-hour of trading, the Dow shot up, finishing up 118.20, or 1.1 percent, at 11140.26.
JPMorgan and Bank of America led blue chips as traders gave those banks the thumbs up. The late-day rally bumped American Express and Citigroup up to the No. 3 and No. 4 spots on the Dow. (Track the Dow winners and losers.)
The S&P 500 also squeaked out a gain but the tech-heavy Nasdaq finished in the red as Research In Motion's outlook rattled tech investors.
For the week, all three major indexes finished lower: The Dow shed 2.2 percent, the S&P lost 3.3 percent and the Nasdaq tumbled 4 percent. Materials were the week's worst performers, followed by financials. Health-care stocks fared the best.
Bailout talks ended without a deal Thursday night but lawmakers remained under pressure as they continued to try to hammer out a deal today.
"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.
"Once this deal gets done, the market will probably rally pretty hard for a couple of days," said Michael Cohn, chief investment strategist at Atlantis Asset Management. In fact, "this market might've actually rallied on the WaMu news because it was a takeover — without taxpayer pain."
The U.S. shut down the nation's largest savings and loan, Washington Mutual , late Thursday, wiping out its stock. But it didn't have to bail it out: 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.