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Stocks Cap Week With Big Gains As Banks Bounce Back, Retailers Rally

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Stocks staged a strong rebound Friday to cap a tumultuous week with big gains, paving the way for a 3% or better advance for the major market indexes.

The Dow Jones industrial average led with a 0.9% jump; the S&P 500 and Nasdaq each added 0.8%. Volume was lighter across the board vs. Thursday, according to preliminary data.

Oil, retail and financial stocks rallied in today's stock market action, as West Texas intermediate crude prices extended their gains by 0.4% to above $48 a barrel and bank stocks bounced back from Thursday's sell-off. But utilities, gold and building-related stocks lagged.

Deutsche Bank (DB) vaulted 14% in massive trade, more than making up for Thursday's loss, on reports of a possible settlement with the Justice Department. The stock is still below its 50-day moving average and 57% off its 52-week high.

On the Dow, big banks Goldman Sachs (GS) and JPMorgan Chase (JPM) gained 1.5% and 1.4%, respectively, after also taking a hit Thursday. All but one blue chip, Verizon Communications (VZ), scored gains. The wireless carrier edged down 0.3% in below-average volume.

Among retailers, Wal-Mart (WMT) climbed 2% in brisk trade as shares build a flat base. KeyBanc late Thursday began covering the retail giant with an overweight rating and 90 price target.

 Costco Wholesale (COST) gapped up and rose 3% in fast turnover after reporting better-than-expected earnings and a 3% rise in same-store sales. Shares are still below the 200-day moving average and on Friday the stock saw upside resistance at the key long-term line.

Over on the IBD 50, chipmaker Macom Technology Solutions (MTSI) led with a 3% jump, while Biogen (BIIB) and PRA Health Sciences (PRAH) each weighed in with a 2% gain.

In economic news, the University of Michigan's consumer sentiment index for September came in at 91.2, just above consensus views for 90.1.

Up Monday: The Purchasing Managers' Manufacturing Index (PMI) for September, the Institute for Supply Management's (ISM) manufacturing composite index, also for September, and construction spending in August.

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