NEW YORK (CNNfn) - A week of trying and tribulation for Wall Street ended in triumph Friday as bargain hunters emerged from hiding and, at first timidly, then with gusto, scooped up crippled technology and financial shares whose value had dropped precipitously in the previous four days.
The Dow Jones industrial average rallied 167.61 points, or 2.2 percent, to 7,899.52, scoring a 1.5 percent gain for the week and cutting its loss for the year to 0.1 percent.
Advances led declines 1,925 to 1,247 as 883 million shares changed hands on the New York Stock Exchange.
The Nasdaq Composite, which lost more than 12 percent in the first four days of the week, surged 73.37, or 5.17 percent, to 1,492.49, its third-largest one-day point gain in history. Nevertheless, the Nasdaq lost 7.6 percent this week and is now down almost 5 percent for the year.
The S&P 500 index rose 24.88, or 2.6 percent, to 984.32 on the day, but fell 1.8 percent for the week and now holds a 1.4-percent gain for the year.
Most of the rally was focused on a small group of market heavyweights; and many investors remained nervous about the future of the global economy and the direction of the world's markets. A relatively stable dollar --following two days of heavy pummeling -- and gains in stock markets overseas gave little comfort to weary stock traders. Instead, market participants drew optimism from speculation that the Federal Reserve may lower interest rates sooner than its next policy meeting on Nov. 29, a move that would be highly unusual for the Fed.
A rate cut of 1/4 of a percentage point two weeks ago disappointed the market and resulted in two days of heavy selling in stocks as investors deemed the move too small to make a difference.
"There are a lot of uncertainties out there," said Sam Stovall, senior investment strategist at Standard & Poor's. (417K WAV) or (417K AIFF)
The bond market finished mixed. The benchmark 30-year Treasury bond plummeted 1-27/32 points in price, raising the yield to 5.11 percent. But the short-end of the market, Treasury securities maturing in less than 2 years, traded in positive territory most of the day, still attracting investors seeking quality amid the stock market's volatility. The bond market will be closed Monday for the Columbus day holiday.
The dollar fell against the Japanese yen as investors saw no sign that central banks might intervene in the market to boost the greenback. The dollar settled nearly unchanged against the German mark.
Next week, earnings reports from several technology heavyweights and a series of inflation data are likely to draw investors' attention.
Leading down, leading up
In stocks, technology and financial blue chips, the most volatile and hardest hit market sectors in this week's tumultuous run, were the leaders on the upside as investors sought bargains among these cheapened stocks.
On the Nasdaq, shares of Dell Computer (DELL) rallied 4-3/8 to 52-13/16 and Intel (INTC) soared 5-3/8 to 83-13/16. Piper Jaffray raised its third- and fourth-quarter earnings estimates for Intel. The chip maker is due to report its latest results Tuesday. Microsoft (MSFT) jumped 5-11/16 to 96-7/8 and Cisco Systems (CSCO) climbed 3-3/8 to 50-1/16.
Among Big Board technology blue chips, Dow component IBM (IBM) rose 3-13/16 to 127-5/16.
Financial stocks, whose late rally was largely responsible for the Dow's last-hour recovery from a 270-point tumble Thursday, once again put in a boisterous performance after a wobbly start to the session.
Shares of Dow member Citigroup (CCI), the day-old union of Citicorp and Travelers, rose 2-15/16 to 35-7/16. Fellow Dow member J.P. Morgan (JPM) gained 4-3/4 to 84-5/8 and American Express (AXP) rose 4-5/8 to 77.
Shares of Chase Manhattan (CMB) gained 2-5/16 to 42-13/16, BankAmerica (BAC) rose 4-5/16 to 53-15/16 and Bankers Trust (BT) climbed 4-3/8 to 58-7/8.
In the brokerage niche, Merrill Lynch (MER) rose 3-1/4 to 45-3/4 and was the third-most- active stock on the Big Board as rumors swirled that influential investor Warren Buffett had bought a chunk of the company's stock. Lehman Brothers (LEH) gained 3-3/4 to 33-3/16.
Among the day's newsmakers, shares of the country's No. 1 provider of medical supplies to hospitals, Allegiance (AEH), rallied 9-7/16, or more than 41 percent, to 32-7/16 on news Cardinal Health (CAH) is buying the company in a stock deal valued at $4.5 billion. Cardinal's stock tumbled 8-11/16, or more than 9 percent, to 84, leading the list of losers on the Big Board.
Investors' reception to the day's other deal was less warm. Shares of computer management firm Inacom (ICO) lost 15/16, or more than 5 percent, to 15-7/8 and Vanstar (VST), a computer reseller and consultant, slipped 7/16, also more than 5 percent, to 7-15/16. Inacom has agreed to buy Vanstar in a deal that would create a company with $7 billion in revenue and a workforce of more than 12,000.
(Click here for a look at today's CNNfn market movers.) 
-- by staff writer Malina Poshtova Zang
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