US STOCKS-Markets higher as banks lead rebound

* Germany’s parliament approves bailout contribution

* Bank shares gain, Goldman climbs on rumor of settlement

* Dell falls after results, AnnTaylor rises

* Indexes up: Dow 1.1 pct, S&P 1.5 pct, Nasdaq 1.6 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to midday, changes byline)

By Ryan Vlastelica

NEW YORK, May 21 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) rose 1 percent on
Friday, with bank shares leading a rebound from earlier
declines as worries ebbed over the sovereign debt crisis in
Europe and U.S. financial reform.

Goldman Sachs Group Inc (GS.N: ) jumped 5.2 percent to
$143.17 after analysts cited rumors of a possible settlement
with U.S. regulators as well as sentiment bank stocks were
oversold after the KBW Bank Index (.BKX: ) dropped 5 percent on
Thursday. For details, see [ID:nN21182939]

Markets opened lower, with the S&P 500 briefly falling
below the level reached during the market “flash crash” earlier
this month. The S&P has suffered several days of declines that
drove the index down more than 10 percent from an April high.

Germany’s parliament approved a law allowing the government
to contribute to a 750 billion euro ($937.8 billion) bailout
package to help protect the euro. [ID:nLDE64K0S1]

“The vote in Germany doesn’t solve all the problems in the
euro-zone, but it demonstrates political will and is an
effective near-term Band-Aid,” said Matt Kaufler, equity
analyst at Clover Capital Management in Rochester, New York.

Kaufler added that investors decided “the sell-off on both
sides of the Atlantic was overdone.”

The Dow Jones industrial average (.DJI: ) was up 108.07
points, or 1.07 percent, at 10,176.08. The Standard & Poor’s
500 Index (.SPX: ) was up 16.22 points, or 1.51 percent, at
1,087.81. The Nasdaq Composite Index (.IXIC: ) was up 35.69
points, or 1.62 percent, at 2,239.70.

Bank shares rose a day after the U.S. Senate approved a
sweeping Wall Street reform bill, capping months of wrangling
over the biggest overhaul of financial regulation since the
1930s. [ID:nN20244272]

JP Morgan Chase & Co (JPM.N: ) advanced 5.3 percent to $39.83
and was the top boost on the Dow, while Bank of America Corp
(BAC.N: ) rose 4 percent to $15.93. The S&P financial sector
index (.GSPF: ) rose 3.4 percent.

The S&P hit a session low of 1055.90 before shooting as
high as 1080.67 within a half-hour, led by the turnaround in
financial stocks. The closing low for the year was 1056.74 in

At Thursday’s closing level, the S&P 500’s 14-day Relative
Strength Index had fallen below 30 for the first time since the
benchmark hit 12-year lows in March 2009, indicating the index
was oversold.

On the earnings front, Dell Inc (DELL.O: ) fell 5 percent to
$13.62, one day after posting a better-than-expected quarterly
profit but weak gross margins. [ID:nN20149934]

AnnTaylor Stores Corp (ANN.N: ) climbed 8.5 percent to $21.95
after it posted higher-than-expected quarterly earnings. Inc (CRM.N: ) rose 6 percent to $83.85, a day
after it forecast full-year profit at the low end of estimates
as it said it plans to increase spending to fuel sales growth.
[ID:nN21155338] and [ID:nN20213845]

The Chicago Board Options Exchange Volatility index (.VIX: ),
Wall Street’s so-called fear gauge, fell 14 percent to 39.32
after hitting a high of 48.20.

May equity options and some options on stock indexes will
stop trading at Friday’s close and settle on Saturday, which
may increase volatility. [ID:nN21137375]

Penny Stocks

(Editing by Jeffrey Benkoe)

US STOCKS-Markets higher as banks lead rebound