Dow, S&P rebound after two-day plunge

Traders work on the floor of the New

Traders work on the floor of the New York Stock Exchange on Thursday. There are no economic indicators due Friday, and it appears that many investors think Thursday's sell-off was an overreaction. (June 20, 2013) (Credit: Getty Images)

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Traders decided that the stock market has suffered enough, at least for now.

After a two-day plunge, stocks ended the week with an advance Friday, suggesting that Wall Street may be successfully weaned from the Federal Reserve's easy money.

"Saner heads are prevailing," said Jim Dunigan, chief investment officer at PNC Wealth Management. "People are looking a little deeper into the message from the Fed -- the economy is getting better."

Investors had known that sooner or later the Fed would quit spending $85 billion per month pumping money into the U.S. economy. That money has been a big driver behind the stock market's bull run the last four years. The Standard & Poor's 500 index hit an all-time high of 1,669 on May 21.

Then on Wednesday, the Fed said it would aim to turn off that spigot by the middle of next year. Just because investors knew it was coming didn't mean they liked it. The Dow Jones industrial average dropped a total of about 560 points on Wednesday and Thursday.

Investors recovered their mojo Friday. The Dow rose 41.08 points to close at 14,799.40. The S&P 500 rose 0.27 percent to close at 1,592.43.

-- AP

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