Stocks Stage Bargain-Hunting Rally

Stocks staged a late rally Friday as investors picked through the rubble of  five straight days of selling amid chronic jitters about corporate accounting practices and profits.

The blue-chip Dow Jones industrial average climbed 118.80 points, or 1.23 percent, to 9,744.24. The broad Standard & Poor's 500 index was up 16.05 points, or 1.49 percent, to 1,096.22.

The tech-laced Nasdaq Composite Index rose 36.77 points, or 2.06 percent, to 1,818.88.

For the week, the Dow was down 1.6 percent, the Nasdaq slumped 4.8 percent and the S&P 500 declined 2.3 percent.

"After a week of emotional selling people are seeing values," said Eric Teal, a fund manager for Evergreen Asset Management. "Those gut-wringing moments, when investors give in, is where you can make significant gains in your portfolio. And with the economy recovering, stocks are offering a good opportunity here."

Stocks of firms that had been battered by accounting questions, like conglomerate Tyco International and AOL Time Warner Inc. jumped, and telecommunications and financial shares climbed after being slammed in previous sessions.

Tyco was the most active stock on the New York Stock Exchange for the 10th-straight session, and added $1.83 to $29.88. The stock has lost almost half its market value this year as it got caught up in a sell-off sparked by fears it improperly accounted for its acquisitions, something Tyco has denied.

"It looks like the accounting concerns, with regard to the biggest-cap companies like GE, Tyco, are subsiding, and as such, the bears are going to be hard-pressed to keep this issue rolling," said Robert Robbins, chief investment strategist at SunTrust Robinson Humphrey.

AOL shares, which recently had been falling partly because investors find it tough to assess its financial books after a slew of acquisitions, rose $1.91 to $27.36.

AOL Chairman Stephen Case earlier this week bought 1 million common shares in his firm, the world's largest Internet and media company, according to a U.S regulatory filing made public late on Friday.

Irish drugmaker Elan Corp. , also a recent casualty, rose $1.31 to $14.80, after losing 51 percent of its market value in the past five sessions. Elan said late Thursday the Securities and Exchange Commission is probing allegations the company engaged in deceptive accounting practices.

Financial stocks, which had been battered on worries their profits would be hurt from charges resulting from Enron Corp.'s bankruptcy, also advanced. Citigroup for one, rose $1.35 to $45.49 and helped boost the Dow average.

Stocks had dropped for five sessions amid a slew of bad news, including a tepid forecast from Cisco Systems Inc. . The S&P 500 suffered its longest losing streak since the market reopened after a four-day shutdown caused by the Sept. 11 attacks on the United States.

Part of the recent sell-off had stemmed from accounting irregularities at Enron which led to its collapse. Investors had honed in on shares of companies with complex financial structures like Tyco.

At least for now, Wall Streeters are saying jitters are receding into the rear-view mirror.

Not all worries have passed, though. Wireless technology firm Qualcomm Inc. fell $1.65 to $37.46 after a research firm raised concerns about accounting issues in the company's fourth-quarter and full-year financial reports.

In other news, Corning Inc. climbed $1.08 to $7.52. The world's No. 1 maker of fiber-optic cable said it sees first-quarter results largely in line with Wall Street's expectations and added the quarter will mark the bottom for its businesses.

Shares of companies with asbestos exposure sold off after a New York State court jury ruled against a unit of diversified manufacturer Honeywell International Inc. to award $53.5 million to the family of Stephen Brown, a 51-year-old man who died of asbestos exposure, the plaintiff's attorney said.

The verdict was against Bendix, a former unit of AlliedSignal which has since merged with Honeywell.

Honeywell tumbled $1.21 to $32.71, but Dow Chemical Co. and Georgia-Pacific erased early declines as the broader market surged. Dow rose 57 cents to $29.92 and Georgia-Pacific gained 54 cents to $23.50.

Investors have said both Dow Chemical and Georgia-Pacific also have some exposure to asbestos liabilities.

Advancing issues outnumbered decliners nearly 2 to 1 on the New York Stock Exchange. Volume was moderate.

The Russell 2000 index, the barometer of smaller company stocks, rose 8.26, or 1.8 percent, to 466.66.

Overseas, markets were mostly higher Friday. Japan's Nikkei stock average finished the day up 1.1 percent. In Europe, France's CAC-40 closed up 0.08 percent, Britain's FT-SE 100 crept up 0.02 percent, but Germany's DAX index fell 0.6 percent.

Reuters and the Associated Press contributed to this report.