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December 12th, 2008
05:23 PM ET

Stocks rally on bailout hopes

Alexandra Twin
CNNMoney.com

Stocks rose Friday, erasing the day's losses, as investors welcomed the Treasury Department's indication it might step in and bail out the troubled automakers after a $14 billion bill collapsed in the Senate.

The Dow Jones industrial average (INDU) added 0.8% according to early tallies. The Standard & Poor's 500 (SPX) index climbed 0.7% and the Nasdaq composite (COMP) gained 2.2%.

Stocks slumped Thursday on fears that the $14 billion auto rescue bill would lose traction in the Senate. Those concerns proved correct. Negotiations fell apart Thursday night, with Democrats, Republicans, the individual companies and the United Auto Workers union unable to reach a compromise.

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