NEW YORK, Dec. 20 (UPI) -- Shares ended up higher Friday on both the New York Stock Exchange and the Nasdaq Stock Market, as Wall Street's biggest banks were fined a total of $1.4 billion by financial authorities for deliberately misguiding investors through their research reports, coupled with news of a solid economic expansion in the third quarter.
The blue-chip Dow Jones industrial average soared 147.21 points, or 1.76 percent, to close at 8,512.01, while the tech-heavy Nasdaq composite index gained 9.53 points, or 0.70 percent, to 1,363.63.
The broader New York Stock Exchange composite index rose 6.22 points to 479.22, while the Standard & Poor's 500 index gained 11.58 points to 895.83, and the American Stock Exchange composite index rose 3.86 points to 826.82.
Volume reached an estimated 1.78 billion shares on the Big Board and 1.83 billion on the Nasdaq Stock Market.
Early afternoon Friday, Wall Street's top 10 investment banks agreed to pay up a collective $1.4 billion amid accusations that research analysts misled investors, which was a key factor driving up the stock market in the late 1990s. The announcement led the banking sector to post some of the day's biggest day, even though under the latest agreement, no official will be singled out and be prosecuted or penalized.
The 10 banks will pay $900 million to investors who were particularly hurt by the stock market's collapse as "retrospective relief," while $450 million will be used to fund independent research, and $85 million will be used for "investor education."
"This agreement will permanently change the way Wall Street operates," said New York's Attorney-General Eliot Spitzer, who led the case. "Our objective throughout the investigation and negotiations has been to protect the small investor and restore confidence to the marketplace."
Citigroup's Salomon Smith Barney will be footing the largest portion of the fine at $400 million, while Credit Suisse First Boston and Merrill Lynch will be paying up $200 million each.As for the seven other banks, namely Morgan Stanley, Goldman Sachs, UBS Warburg, Deutsche Bank, JP Morgan Chase, Bear Stearns, and Lehman Bros., they will be paying $50 million each.
Meanwhile, investors were also encouraged by the Department of Commerce's report earlier in the day that its final estimate for third quarter gross domestic product reached 4.0 percent, up from the 1.3 percent posted in the previous quarter.
Meanwhile, Fed Chairman Alan Greenspan's comments late Thursday in New York lifted market sentiment slightly. He told members of the Economic Club in New York that another asset bubble and a subsequent burst of it would be unlikely.
He also reassured the group that the risks of deflation were small, and growth was likely to be steady albeit at a slower pace than before.
As for U.S. Treasuries, prices fell slightly. The 10-year bond fell 6/32 to 100 10/32. Its yield, which moves in the opposite direction of its price, rose to 3.96 percent.
In Europe, stock prices were stronger in London, Frankfurt and Paris. The London International Stock Exchange's blue-chip FTSE-100 index gained 48.50 points, or 1.26 percent, to 3,889.90, the German DAX index rose 62.81 points, or 2.12 percent, to 3,024.22, while the French CAC-40 index increased by 28.64 points, or 0.94 percent at 3,082.85.
In Asia, Japan's benchmark Nikkei-225 average nudged up 19.31 points, or 0.23 percent, to 8,406.88, while Hong Kong's Hang Seng index rose 70.83 points, or 0.74 percent, to 9,628.69.
South Korea's composite index inched up 0.22 points, or 0.03 percent, to 709.44, while Singapore's Strait Times index dipped 17.18 points, or 1.27 percent, to 1,337.45.
