US STOCKS-Wall St lifted by banks after dismal week

* Bank shares gain, Goldman climbs on settlement talk

* Germany’s parliament approves bailout contribution

* Dell falls after results

* Indexes up: Dow 1.3 pct, S&P 1.5 pct, Nasdaq 1.1 pct

* For up-to-the-minute market news see [STXNEWS/US]
(Updates to close)

By Leah Schnurr

NEW YORK, May 21 (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) snapped a
three-day losing streak on Friday as investors bought
beaten-down shares including banks on bets the financial
regulation bill won’t be as onerous as some had feared.

Nonetheless, the benchmark S&P 500 index was down 10.6
percent from its April 23 high in what is traditionally
considered a correction as investors fled risky assets on fears
the euro zone’s debt crisis will crimp global growth.

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

The Senate bill reduced uncertainty on what the final bill
will look like, analysts said, which could still be watered
down in negotiations with the House. Bank stocks jumped after
having taken a beating on expectations the bill would cut
profits. JP Morgan Chase & Co (JPM.N: ) was the Dow’s top boost,
surging 5.9 percent to $40.05.

“It seems to be a little less onerous than people had
anticipated, but the devil’s in the details and there’s still a
lot to play out on that,” said David Katz, chief investment
officer at Matrix Asset Advisors in New York.

The Dow Jones industrial average (.DJI: ) gained 125.38
points, or 1.25 percent, to 10,193.39. The Standard & Poor’s
500 Index (.SPX: ) jumped 16.10 points, or 1.50 percent, to
1,087.69. The Nasdaq Composite Index (.IXIC: ) rose 25.03 points,
or 1.14 percent, to 2,229.04.

Trading was choppy throughout the session as May equity
options and some options on stock indexes will stop trading at
Friday’s close and settle on Saturday. [ID:nN21137375]

“I think that May expiration is adding a little bit more
volatility to the market,” said Joe Cusick, senior market
analyst at online brokerage optionsXpress in Chicago.

Early in the session the S&P 500 briefly fell below its
lowest level of the May 6 “flash crash.” For the week, the S&P
ended down 4.2 percent, the Dow lost 4 percent and the Nasdaq
was down 5 percent.

The Senate bill must now be merged with a measure approved
in December by the U.S. House of Representatives. Top
Democratic lawmakers said they aim to get a bill approved by a
House-Senate conference committee to President Barack Obama to
sign by July 4. [ID:nN21193922].

Bank of America Corp (BAC.N: ) rose 4.7 percent to $15.99,
while the S&P financial sector index (.GSPF: ) gained 3.6
percent.

Goldman Sachs Group Inc (GS.N: ) advanced 3.3 percent to
$140.62 on rumors of a possible settlement with the Securities
and Exchange Commission of fraud charges, though sources
familiar with the matter said no agreement had been reached.
[ID:nN21182939].

Helping to ease worries about sovereign debt, Germany’s
parliament approved a bill to allow the country to contribute
to rescue aid for Greece and other euro zone nations burdened
with high debt loads.

In earnings news, Dell Inc (DELL.O: ) fell 6.8 percent to
$13.35 a day after reporting a gross margin that fell short of
analysts’ forecasts. [ID:nN20149934]

Investors were also tempted back into the market after a
nearly 4 percent sell-off on Thursday, the biggest one-day drop
since April 2009, that left stocks at cheap valuations.

“There’s a complete disconnect between benign levels of
both interest rates and inflation and the fact that S&P 500
multiples are so low when the economic fundamentals in the U.S.
are still pretty positive,” said Phil Orlando, chief equity
market strategist, at Federated Investors, in New York.

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.

Stocks

(Additional reporting by Doris Frankel in Chicago; Editing by
Kenneth Barry)

US STOCKS-Wall St lifted by banks after dismal week