Stocks open higher on auto bailout

NEW YORK (CNNMoney.com) -- Stocks opened higher Friday after President Bush said he would give a $13.4 billion federal loan to the Big Three.

The Dow Jones industrial average (INDU) rose 1.2% shortly after the opening bell. The broader Standard & Poor's 500 (SPX) advanced 1%, and the Nasdaq composite (COMP) jumped 1.8%.

On Thursday, all three indexes ended sharply lower in a volatile session as investors continued to worry about the economy.

President Bush said on Friday that emergency loans to automakers General Motors (GM, Fortune 500) and Chrysler are necessary to avoid a "disorderly" collapse of the auto industry.

Also, Friday is a "quadruple witching" day. Quadruple witching, which occurs four times a year, is the simultaneous expiration of market index futures, market index options, stock options, and stock futures. As investors rush to unwind positions, stocks have the potential to whipsaw sharply.

Dave Rovelli, managing director at Canaccord Adams, said the options expirations will fuel a "hairy and volatile" open, especially since it follows Standard & Poor's downgrading of 11 companies, including the financial firms Goldman Sachs (GS, Fortune 500), Deutsche Bank (DB) and UBS (UBS).

The only major economic data due out is a reading on regional and state employment from the Labor Department. The information becomes available in the weeks after the main monthly national labor figures are released. The data drills deeper and could pressure markets if it paints a dour picture.

In company news, the Japanese electronic company Panasonic said it would acquire its rival Sanyo for up to $9 billion.

Still, with little else on tap, investors will largely get a break from the constant barrage of grim economic and corporate news.

World markets: Global markets were mixed. Asian shares ended lower. In Europe, Britain's FTSE 100 was higher, but Germany's DAX and France's CAC-40 were lower at midday.

Oil and money: Light, sweet crude for January delivery plunged $1.14 to $35.08 a barrel after dipping below $37 a barrel Thursday night and hitting a 4-1/2 year. Friday is the last day for January as the front month contract. The February contract was up 9 cents to $41.76 a barrel.

The U.S. dollar rose against the yen, the euro and the British pound.

The Bank of Japan announced on Friday that it slashed its interest rate to 0.1%. Even before the cut, Japan had the second-lowest rate among the world's major economies at 0.3%.

On Tuesday, the Federal Reserve cut its key interest rate to a range of 0% to 0.25%.