NEW YORK, Dec. 28 (UPI) -- Stocks rallied Friday gaining more than 81 points as the 2007 trading year wound down.

Investors reacted favorably to reports that U.S. and European banks, including Citigroup, were considering sales of everything from branches to entire units.

The Dow Jones industrial average rose 81.94 points, or 0.61 percent, to 13,441.55 in early trading. The Nasdaq composite was up 17.90 points, or 0.67 percent, to 2,694.69. The Standard & Poor's 500 Index was up 11.13 points, or 0.75 percent, to 1,487.50.

Overseas, Asian stocks finished lower amid uncertainties touched off by the assassination of Pakistan opposition leader Benazir Bhutto. Tokyo's Nikkei 225 closed down 1.7 percent at 15,307.78 in the year's final trading session in Japan.

The dollar weakened against the euro and yen. The euro traded at $1.4676 from $1.4610 late Thursday, while the dollar changed hands at 113.24 yen from 113.68 yen.

Bonds advanced. The 10-year Treasury note rose 10/32 to yield 4.162 percent.

Oil moves beyond $97 barrel mark

NEW YORK, Dec. 28 (UPI) -- Crude-oil prices rose 83 cents to $97.43 a barrel at the New York Mercantile Exchange after larger-than-expected declines in U.S. crude inventories and on heightened geopolitical concerns following the Bhutto assassination.

Crude for January delivery rallied Thursday after a report that U.S. inventories fell 3.3 million barrels last week to 293.6 million, a drop more than expected and sixth consecutive weekly decline.

Heating oil was down 0.4 cents at $2.6763 a gallon. Reformulated gas was down 0.72 cents to $2.409 a gallon. Natural gas fell 0.11 cents to $7.09 per million British thermal units.

The average U.S. price at the pump for regular unleaded gasoline hit $3 Friday, the AAA said, a fraction above Thursday's price.

Buffett opening bond insurer business

NEW YORK, Dec. 28 (UPI) -- Billionaire investor Warren Buffett is opening a bond insurer business in New York aimed at making it cheaper for cities and states to borrow money.

The new venture by Buffett's Berkshire Hathaway Assurance Corp., backed by an almost-certain triple-A credit rating, reportedly plans to guarantee loans local governments use to finance sewer systems, schools, hospitals and other public projects.

The initial program covers only New York state but expansion is reported probable.

It's likely to be cheered by municipalities and municipal-bond investors when other bond insurers' ratings look wobbly, The Wall Street Journal said Friday.

Buffett said in a Journal interview that interest appears high enough for the new company to seek permission to operate in other states that account for a large chunk of municipal-debt issuance. After New York, he said, he expects to seek approval to open in California, Puerto Rico, Texas, Illinois and Florida.

Mortgage crisis hits newspaper ad revenue

NEW YORK, Dec. 28 (UPI) -- The U.S. newspaper industry felt the barbs of the subprime mortgage crisis through a sharp decrease in real estate advertising, a New York report said.

A major example came from Tribune Company, which reported a 40 percent decline in November real estate classified ad revenues at its Chicago Tribune and Los Angeles Times.

Gannett said it was on track for a 27 percent drop in real estate advertising for the fourth quarter after reporting a 23 percent slide in the third quarter, the Financial Times said. Several others have reported similar circumstances.

While reminiscent of the bursting of the dot-com bubble in 2000, the current problem presents broader challenges, the report said, because in part of the flight of classified ads to low-cost competitors on the Internet, the Financial Times said.