Congress is considering a new agency designed to give consumers more protection.

Andrew Torgan
CNN Financial News Producer

Stocks rallied at the end of a strong week, with the Dow and S&P 500 hitting their highest levels in more than a year as investors extended a seven-month rally.

At the close, the Dow added 78 points, the Nasdaq gained 15 points and the S&P 500 tacked on 6 points.

The Dow gained in four of five sessions this week and the S&P 500 and Nasdaq gained in all five as investors dove back into the market after a two-week selloff.

The week was peppered with upbeat news on both the economic and global fronts, which helped lessen concerns that the stock market has gotten too far ahead of a recovery.

Trade gap narrows

The U.S. trade deficit unexpectedly narrowed in August as exports posted a small gain and imports fell on a big drop in demand for foreign oil.

The Commerce Dept. said the trade deficit declined more than 3% to $30.7 billion; surprising economists who had expected higher oil prices to push the imbalance to around $33 billion.

The continued rise in exports may be viewed as an encouraging sign that the global economy is starting to recover from the recession that began in the U.S. and quickly spread overseas.

Bernanke hints at rate hikes

Fed Chief Ben Bernanke said late Thursday that the central bank could tighten monetary policy as the recovery takes hold.

Policymakers have pumped more than $2 trillion into the economy and have kept interest rates at historic lows.

Bernanke's comments strengthened the value of the dollar - pushing the greenback off a 14-month low against the euro.

Obama pushes consumer protection agency

President Obama today made his strongest push yet for the creation of a new consumer protection agency, lashing out against those who have lobbied hard to stand in its way.

The Obama Administration sent Congress its proposal for a Consumer Financial Protection Agency in late June. The proposal has been met with disdain from banks and big business.

"They're doing what they always do - descending on Congress and using every bit of influence they have to maintain a status quo that has maximized their profits at the expense of American consumers," Obama said in remarks at the White House. "That's why we need a Consumer Financial Protection Agency that will stand up not for big banks and financial firms, but for hardworking Americans."

Banks succeeded last month in stripping out of the bill a provision that would have required banks and others to offer uncomplicated financial products, like easy-to-understand applications for 30-year-fixed mortgages, as alternatives to more complex ones.

GM closer to selling Hummer

General Motors moved a step closer to selling its Hummer brand today when it announced that it had signed a definitive agreement with a Chinese manufacturer.

Sichuan Tengzhong Heavy Industrial Machinery Co. and GM said in June that they had reached a preliminary agreement and expected to close the deal by the end of September.

It appeared the deal may be in trouble after the companies missed that target last week. Today's announcement provides assurances that the agreement has not come undone.

GM spokesman John McDonald said the terms of the definitive agreement are along the lines of the earlier deal. The Chinese government still must give its approval.

The deal represents China's first significant move into the U.S. auto market.

And as part of the deal, the Hummer H3 will continue to be built at GM's Shreveport, LA assembly plant on a contract basis at least through June 2011, while the H2 will be built at privately-held AM General's Mishawaka, IN assembly line. The Indiana facility also produces the Humvee vehicles used by the U.S military.

Both contract agreements have a one-year extension option. The deal is expected to protect about 3,000 U.S. jobs, according to GM.

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