Markets Shake-Off WaMu Failure, Bailout Delay

New York, NY - A late rally sent the markets higher Friday as the financial sector surged 3.2 percent despite the biggest bank failure in U.S. history, Washington Mutual.

Delays on a bailout plan seemed to weigh less on the markets than in previous sessions. Throughout the trading day, lawmakers offered assurances that a bailout deal would be reached.

The Dow Jones Industrial average rose 121 points or 1.1 percent. 20 of 30 Dow components finished the session higher. JP Morgan provided the most strength, adding 10.1 percent as news that the bank would acquire a bulk of WaMu assets and deposit sent shares higher.

The S&P 500 added 4 points or 0.35 percent. The financial sector was the main catalyst for the index as the other major economic sectors were relatively flat. The materials sector was the biggest laggard on Friday.

Tech did not fare as well with the Nasdaq Composite shedding 3 points or 0.15 percent. Research in Motion, down 27 percent, weighed heavily on the tech sector after the company reported quarterly earnings that were just short of Wall Street expectations. The blackberry maker also lowered it earnings outlook for the current quarter.

Crude oil fell $1.13 a barrel, settling at $106.89 on the New York Mercantile Exchange.

For the week, the Dow Jones Industrial average finished 1.2 percent lower. The S&P 500 and Nasdaq were also down on the week.

In other corporate news, recent reports have said Citibank is in talks to acquire Wachovia.

In economic news, the government released the final real Gross Domestic Product (GDP) reading for the second quarter. The final result is 2.8 percent annual growth rate, down from the previous reading of 3.3 percent.

The University of Michigan released its latest September consumer sentiment reading, which registered at 70.3, just slightly short of the 70.8 economists had expected.