The markets put the finishing touches on one of the most unforgettable weeks in Wall Street history with a wave of buying on Friday after the government came to the financial system's aid with a massive rescue effort. 

Today's Market

The Dow Jones Industrial Average jumped 368.75 points, or 3.35%, to 11388.44; the Standard & Poor’s 500 added 48.45 points, or 4.02%, to 1254.96 and the Nasdaq Composite picked up 74.80 points, or 3.40%, to 2273.90. The FOX 50 rose 28.01 points, or 3.21%, to 901.42.

“I don’t think we’ve ever seen anything like this. This week is one for the history books,” said Ryan Detrick, equities analyst at Schaeffer’s Investment Research.

Friday's stunning move to the upside came after the federal government unveiled a three-pronged attack aimed at bringing the current financial crisis to an endgame. At the forefront of this rescue is a planned entity that will hold the toxic assets that banks can't rid from their balance sheets -- one that some say could cost $1 trillion.  

“The moves are absolutely staggering,” said Anthony Conroy, head trader at BNY ConvergEx. “I think the Fed is doing everything it possibly can to keep the financial system sound. It’s a world-wide effort to keep stocks afloat.”

Incredibly, Friday’s colossal rally nearly brought the markets to a break-even point for the week, erasing most of a pair of massive selloffs sparked by credit and bankruptcy fears. The Dow saw a remarkably wide trading range this week of more than 1,000 points -- a range that's often not eclipsed during an entire month of trading. 

Friday's rally came on extremely strong volume of nearly 3 billion on the New York Stock Exchange, setting a new record. The exchange also set a record with 1.2 billion shares changing hands during the first hour of trading alone on Friday. Comparatively, a typical day sees about 1.3 billion in volume. 

It's no wonder the markets swung so wildly this week, given the dramatically reshaped financial landscape that's emerging: Storied investment bank Lehman Brothers (LEH) filed for bankruptcy, insurer American International Group (AIG) needed an unprecedented $85 billion loan to avoid disaster, banking behemoth Merrill Lynch (MER) sold itself to Bank of America (BAC) and the credit markets froze to a near halt.

Banks and other financial companies stand the most to gain from the government rescue, thus their stocks saw enormous gains on Friday. Four of the week's hardest-hit names -- Wachovia (WB) and Washington Mutual (WM), Goldman Sachs (GS) and Morgan Stanley (MS) -- all enjoyed massive rallies on Friday. 

Not surprisingly, the largest percentage gainers on the Dow were financial giants AIG, Citigroup (C) and Bank of America. A handful of blue-chip stocks failed to join in the rally, including defensive plays like Coca-Cola (KO) and consumer products maker Procter & Gamble (PG). 

“It’s a sigh of relief. They handed a life preserver out to the market and it’s holding on,” said Frank Davis, director of sales and trading at Lek Securities. “There is no reason for any of these stocks to rebound as much as they are. I still think the smart money is sitting on the sidelines for a good amount” of time.

Banks: Rescue Me!  

Details of the rescue plan have emerged over the past day, sending the blue chips up by as much as 850 points since the close of trading on Wednesday. In fact, Thursday's rally on the Dow was the largest one-day percentage gain in nearly six years. 

The headline component of the plan comes from the Treasury Department, which is spearheading a push to create an entity that will take toxic mortgage-backed assets off banks' balance sheets, allowing them to begin lending again. A Treasury plan of this magnitude will likely cost hundreds of billions of dollars and would be subject to approval from Congress.  

Treasury Secretary Henry Paulson described a "troubled asset relief program" during a press conference Friday morning, calling the efforts "bold" and aimed at restoring confidence in the financial system. No price tag has been cited for the bailout as of yet and a source told FOX Business reporter Rich Edson that Federal Reserve Chairman Ben Bernanke has asked Congress for a bill without a cap. Congress could consider the rescue as early as next week. 

Further details of what such an entity will look like have not yet been hammered out but The Wall Street Journal reported it may resemble the Reconstruction Finance Corporation, which was created in 1932 to inject liquidity by giving loans to banks and other businesses. Others believe the body could emulate the Residential Trust Corporation that was used to help banks emerge from the savings and loan crisis in the late 1980s and early 1990s. 

Get Shorty! 

Financial stocks were also given a huge boost on Friday when the Securities and Exchange Commission released a ban on short selling on 799 financial stocks.  Shorting a stock, or betting that its price will go down, has been blamed as a main culprit in the plummeting shares of financial stocks this year, especially in the demise of Bear Stearns and Lehman. 

The SEC confirmed to FOXBusiness.com that the SEC is considering adding more stocks to the list, giving hope to financial names like CIT Group (CIT) and General Electric (GE). 

While short selling is considered to be a way of getting pricing accuracy in the market, concerns have risen from both government regulators and Wall Street executives that too much short selling is happening -- causing company’s stock to plummet in value too quickly. The ban on short selling will be in effect until Oct 2, the SEC said.

“This is totally ridiculous because everyone is pointing the fingers at the shorts. That's the easy way around the bigger picture that regulators dropped the ball. Shorting is not the cause, it’s a bi-product of a much larger picture," Bob Nunn, chief operating officer of Cohen Specialists, told FOX Business. 

(Click here to read "What the SEC's Ban on Shorting Really Means")

Soothing the Money Markets

Additionally, the government released plans to ease fears about money-market funds just days after Reserve Primary Fund, a $62 billion money-market mutual fund, became just the second fund ever to "break the buck," or expose investors to losses. Money-markets funds are a vital source of short-term liquidity to the markets.

The Treasury said it is instituting a temporary guarantee program to ensure there isn’t a repeat of the Reserve Primary Fund. And the Federal Reserve started $50 billion measures aimed at ensuring money-market funds can meet redemption demands.

That news gave a big lift to financial names like Federated Investors (FII) and Bank of New York Mellon (BK).

Other Market-Moving Headlines

The equities markets weren't even slowed by a $6 jump in crude oil futures, which settled above $100 a barrel for the first time in a week. Crude closed at $104.55 a barrel, up $6.67 on the day. Energy analysts attributed the jump to relief in the financial market rescue plan. 

Gold futures, which had shot up this week amid market fears, fell $32.20 to end at $861.00 an ounce. 

The day’s trading was also subject to quadruple witching, a market phenomenon that sounds more mysterious than it really is. Quadruple witching, which occurs just four times a year and can add volatility to the markets, occurs when options, index options and stock futures options expire all at once.

Corporate Movers

Morgan Stanley (MS), the investment bank reported to be in merger talks with Wachovia (WB), is considering all options, including remaining independent, a source tells FOX Business. Pressure to do a deal quickly has eased given the government's bailout plans, The Wall Street Journal reported. However, a Merrill Lynch analyst said the odds have increased for a deal between Wachovia and Morgan, which has also reportedly held talks to sell up to a 49% stake to China Investment Corp., a state investment fund.

AIG (AIG) shareholders are attempting to pay off the Fed's $85 billion loan before Washington takes an 80% stake in the insurance giant, the Journal reported. However, there remains significant hurdles before this can happen as huge sums of cash would have to be raised to ensure the government gets paid back quickly, the newspaper reported. Earlier this week, the Fed agreed to give AIG an emergency loan at a very high interest rate to avoid the insurer filing for a potentially disastrous bankruptcy.

Oracle (ORCL) posted a better-than-expected quarterly profit late Thursday, sending the software giant’s shares soaring by double-digit percentages. Oracle’s adjusted-profit of 29 cents per share topped analyst estimates by two cents and its adjusted operating margin rose 3.5 percentage points. Oracle sees earnings for the current quarter in-line with analyst estimates.

Palm (PALM) failed to join in the tech rally as shareholders dumped stocks after the phone maker warned its earnings for the current quarter will decline. Palm, which reported results after Thursday’s closing bell, posted a net loss of 39 cents per share, compared to forecasts for a loss of 23 cents. The company gave no specifics for its forecast for the current quarter.

Global Markets

Major foreign indexes posted epic gains on the rescue plans.

The FTSE 100, London’s benchmark index, soared by 431.30 points, or 8.84%, to 5311.30. The gains were the largest in the FTSE 100’s history, according to Bloomberg. The Dow Jones Euro Stoxx 50, which tracks the 50 largest companies in Europe, jumped 252.69 points, or 8.42%, to 3253.52.

Russian stock exchanges bounced back from a two-day closure with such enormous gains that the indexes were halted twice during the day. The RTS and MICEX were up 20% and 26.3% respectively.   

Hong Kong’s Hang Seng Index surged by 1695.27 points, or 9.61%, to close at a reading of 19,327.73.