Todd Leone, managing director at Cowen & Co., cautioned against reading too much into Friday's advance and said the first full week of the new year should provide insight into investor sentiment for 2009.

"The first five days are usually very telling," Leone said. "I'm not sure we'll be up or down." He said an advance in stocks Friday wasn't a surprise as some investors start the year by wading into the market. He said selling is more likely to occur next week.

The Dow rose 258.30, or 2.94 percent, to 9,034.69, finishing the week up 6.1 percent. The blue chips last closed above 9,000 on Nov. 5, when they stood at 9,139.27.

The Dow, the oldest of the big market indexes, fell 33.8 percent in 2008, its worst performance since 1931, during the Great Depression.

Like the Dow, broader stock indicators also advanced for the third straight session. The Standard & Poor's 500 index rose 28.55 percent, or 3.16 percent, to 931.80, its highest close since Nov. 5. The Nasdaq composite index rose 55.18, or 3.50 percent, to 1,632.21.

For the week, the S&P 500 finished up 6.8 percent, while the Nasdaq rose 6.7 percent. The Russell 2000 index of smaller companies rose 6.39, or 1.28 percent, to 505.84.

Advancing issues outnumbered decliners by about 5 to 1 on the New York Stock Exchange. Consolidated volume came to 3.48 billion shares, compared with 3.75 billion on Wednesday.

Bond prices fell as investors took on riskier assets including stocks. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.39 percent late Friday from 2.22 percent late Wednesday. The yield on the three-month T-bill, considered one of the safest investments and in great demand since the credit markets seized up in September, fell to 0.07 percent from 0.08 percent Wednesday.

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