US stocks rose on optimism the ouster of Treasury Secretary Paul O'Neill and Larry Lindsey, the chief White House economic adviser, will pave the way for measures to boost equities and corporate earnings.
Financial shares such as Citigroup Inc led the advance, which sent the Dow Jones Industrial Average and Standard & Poor's 500 Index to their first gains in six days. Verizon Communications Inc and Philip Morris Cos. climbed as some investors bought stocks that pay dividends on speculation policy changes will reduce taxes on payouts.
Still, the Dow recorded its first weekly loss since October amid concern corporate profit growth is slowing. The S&P 500 and NASDAQ Composite Index declined for the first week in four.
With a new group of Bush administration economic advisers, "the likelihood is that the policies that will be adopted by this government will continue the recovery and let corporations enhance profitability," said Robert Goodman, senior economic adviser at Putnam Investments, which oversees US$250 billion in Boston.
The Dow climbed 22.49, or 0.3 percent, 8,645.77. The S&P 500 gained 5.68, or 0.6 percent, to 9,12.23, with financial, consumer and telecommunications shares contributing half the advance. The NASDAQ rose 11.69, or 0.8 percent, to 1,422.44. Qualcomm Inc led the advance after it boosted its forecast for phone-chip shipments.
For the week, the Dow fell 2.8 percent. Its last weekly loss was in the five days ended Oct. 4. The average's eight-week rally was its longest more than 4 1/2 years.
The S&P 500 declined 2.6 percent this week and the NASDAQ 3.8 percent.
Stocks rebounded Friday from initial declines triggered by an unexpected increase in unemployment. Indexes reached their lows for the day in the first 10 minutes of trading after a government report showed the economy unexpectedly lost jobs last month and the unemployment rate rose more than predicted.
* The Dow climbed 22.49, or 0.3 percent, 8,645.77.
* The S&P 500 gained 5.68, or 0.6 percent, to 9,12.23
* The NASDAQ rose 11.69, or 0.8 percent, to 1,422.44.
Three stocks rose for every two that fell on the New York Stock Exchange while eight advanced for every seven declined on the NASDAQ Stock Market. Some 1.24 billion shares traded on the Big Board, 17 percent below the three-month daily average.
Indexes began climbing as investors speculated the overhaul in Washington would boost efforts to pass legislation that would help stock investors.
"It's expected that the new Treasury Secretary, whoever that is, will be certainly a proponent of tax cuts which would be good news for the economy, good news for stocks and maybe not quite as good news for the treasury market," said Prudential Securities economist Michelle Girard on Bloomberg TV.
Citigroup, the largest financial-services company, added US$0.42 to US$37.56. JP Morgan Chase & Co added US$0.82 to US$24.43.
Bank of America Corp climbed US$0.64 to US$68.24.
Putnam's Goodman said measures Bush may propose that could boost the stock market and companies' earnings include cutting taxes on dividends and making payouts to shareholders a deductible expense for corporations.
"It's real cash that you're letting them keep, rather than borrow," he said. "It makes equity financing more competitive with debt financing. It makes investing in dividend-paying companies more attractive."
Verizon and Philip Morris, which both pay dividends of at least 3 percent, were among the biggest gainers in the S&P 500.
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