Market Snapshot: U.S. stocks move higher on financial-reform deal

NEW YORK (MarketWatch) -- U.S. stocks edged up Friday, wiping out only a portion of the week's heavy losses, as relief over a deal on new financial-regulation overhaul helped push stocks modestly higher.

The Dow Jones Industrial Average recently rose 21 points, or 0.2%, to 10,174. The measure was led by its financial components, with Bank of America up 3.6% and J.P. Morgan Chase up 3.5%.

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Easing investors' anxiety over the bill, House and Senate lawmakers reached agreement on a landmark package of financial regulations in the early morning hours on Friday.

While the legislation will impose new capital requirements on banks and for the first time extend comprehensive regulation to the over-the-counter derivatives market, banks will be required to spin off only their riskiest swap-trading operations.

Investors said the bill's passage through Congress eventually watered down some of the most severe provisions. Read about bank-reform efforts in Washington.

"The [lawmakers'] saber-rattling came out very strong and after everything is said and done, it [the bill] comes out in a more muted form," said Russell Croft, co-manager of the Croft Value Fund. "It doesn't seem as draconian as people feared it could be. People can feel like 'ok, they got their licks in on the financial system' and hopefully we can move on now."

Declines in the Dow's consumer components kept its gains in check as investors grew worried about how those sectors could be impacted by a slump in consumer spending. The government cited weaker consumer spending in a downward revision to the government's estimate of first-quarter economic growth.

Coca-Cola dropped 1.6% and Wal-Mart Stores slid 1 no fax needed payday loans.7%.

The Nasdaq Composite climbed 0.6% to 2,232. The Standard & Poor's 500-stock index climbed 0.7% to 1,081. The financial sector led the measure's gains while the consumer-staples sector lagged.

G-20 on radar and BP shares slide

Leaders from the Group of 20 are gathering in Toronto to discuss the state of the global economy as markets have begun reassessing the growth outlook. Markets are also focusing again on BP, whose shares are getting another hammering as the costs of the spill continue to increase.

The dollar fell against the euro and the yen, with the U.S. Dollar Index , reflecting the U.S. currency against a basket of six others, down 0.5% recently.

But demand for safe-haven Treasurys rose, with the 10-year note up to push its yield down to 3.11%. Crude-oil prices jumped to nearly $79 a barrel, while gold futures slipped.

Among stocks in focus, KB Home slid 8.4% after the home builder posted a 23% drop in second-quarter orders, providing further proof of a softening U.S. housing market.

In the tech sector, Research In Motion dropped 9.6% after the company reported a 20% rise in fiscal first-quarter profit but didn't ship as many BlackBerrys as analysts had anticipated. See more about RIM's results.

However, business-software giant Oracle climbed 4.3% after the company reported a 25% rise in fiscal fourth-quarter profit and said new software license sales rose 14%.

American depositary shares of BP dropped to a 14-year low and were recently trading down 6.2%. The oil giant said total costs of cleaning the Gulf of Mexico oil spill reached $2.35 billion.

BP took additional steps to bolster its cash and available credit, adding roughly $5 billion more to its war chest than previously disclosed, a person familiar with the matter told The Wall Street Journal.

After the market closes Friday, the Russell Indexes will post final lists of its re-balanced indexes in its annual re-shuffling of stocks.

Market Snapshot: U.S. stocks move higher on financial-reform deal