* Bank of America falls after government aid
* U.S. financials trim losses after Barclays outlook
* Dow up 0.8 pct, S&P up 0.8 pct, Nasdaq up 1.2 pct
* For up-to-the-minute market news, click []
(Updates to close)
By Leah Schnurr
NEW YORK, Jan 16 (Reuters) - U.S. stocks rose on Friday on
strength in the energy sector and companies that hold up well
in recessions, while reassuring comments from Britain's
Barclays late in the day helped financials cut losses that had
driven the market lower earlier.
The banking sector was in the spotlight throughout the
session after a fresh $20 billion government capital injection
for Bank of America <BAC.N> revived worries about the fate of
the sector.
"For better or for ill, we have to at least keep the banks
going," said Paul Nolte, director of investments at Hinsdale
Associates in Hinsdale Illinois. "Investors are struggling with
what is happening and that's why we're seeing the volatility."
The S&P financial index <.GSPF> pared steep declines to end
down 2.4 percent after Barclays said it expected next month to
report pretax profit for 2008 "well ahead" of analysts'
estimates. Barclays comments came a few hours after its shares
had plummeted by 25 percent in European trade.
Energy shares rose along with a rebound in the price of
oil, while McDonald's <MCD.N> was the Dow's biggest lift,
offsetting the drag from Bank of America and JPMorgan Chase &
Co <JPM.N>.
The Dow Jones industrial average <> rose 68.73 points,
or 0.84 percent, to 8,281.22. The Standard & Poor's 500 Index
<.SPX> gained 6.38 points, or 0.76 percent, to 850.12. The
Nasdaq Composite Index <> was up 17.49 points, or 1.16
percent, at 1,529.33.
Markets will be closed on Monday for the Martin Luther King
Jr. Day holiday, a day before the inauguration of
President-elect Barack Obama.
Friday marked an end to the stock market's run under the
administration of President George W. Bush. The S&P 500 lost
more than 35 percent of its value since the day Bush took
office in 2001, wiping out more than $4.6 trillion of investor
wealth during his eight-year presidency.
By contrast, under his predecessor, William Clinton, the
S&P tripled, gaining more than $9 trillion.
On the heels of the financial lifeline for Bank of America,
the bank posted its first quarterly loss in 17 years, while
Citigroup <C.N> also reported a hefty quarterly loss and said
it plans to split into two units. For more details, see
[]. Citigroup fell 8.6 percent to $3.50.
Bank of America and JPMorgan Chase & Co <JPM.N> were the
Dow's biggest drags, falling 13.7 percent to $7.18 and 6.2
percent to $22.82, respectively. Although JPMorgan is viewed as
being healthier than Bank of America and Citigroup, it posted a
hefty decline in quarterly profit on Thursday.
Despite the maneuvers surrounding the financial sector,
analysts said worries persisted over the health of the group
and whether banks will need to raise more capital as they
struggle to deal with the credit crunch and global economic
slowdown.
McDonald's <MCD.N> gained 2.9 percent to $59.67 after its
chief executive told CNBC television the company expected to
continue paying dividends. [].
Energy shares, including Exxon Mobil <XOM.N>, rose along
with oil prices as short covering overshadowed a gloomy demand
outlook. U.S. crude <CLc1> was up $1.11 to $36.51 a barrel,
while Exxon gained 1.9 percent to $78.10.
Highlighting the deteriorating economy, there was no let up
in companies announcing job cuts. Advanced Micro Devices Inc
<AMD.N> said it would cut 1,100 jobs, while The Wall Street
Journal reported that drugmaker Pfizer Inc <PFE.N> plans to lay
off as many as 2,400 sales staff.
(Editing by Leslie Adler)
